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UK Weekly Commentary - 17 June 2020

UK weekly commentary from Awa Brokers covering highlights, what we’re thinking about the markets and what your clients may be asking this week.


What we think

Dr Dayo Abinusawa MBA, PhD (Cantab), Head of Strategy and Research on what this report says about the economy.

528.9K - this was the change in the number of people receiving unemployment benefits in the UK. Although claimant count change improved in May, it was worse than estimates of 400.0K. Average earnings have declined as well as the number of new passenger car registrations, an indication there is reducing consumption. The total amount of quantitative easing the Bank of England has chosen to implement increased between March and May and is expected to edge higher in June.

Week ahead

Average Earnings ex Bonus (Apr) – Average earnings excluding bonus edged lower to 1.7%, below the forecast of 1.9%, following a 2.7% decrease in the previous period.

Average Earnings Index +Bonus (Apr) – The change in price businesses and the government pay for labour, including bonuses, came in at 1.0%, below expectations of 1.4%. Average Earnings Index plus bonus declined by 2.3% in March.

Claimant Count Change (May) – In May, claimant count edged lower to 528.9K (worse than estimates of 400.0K) from 856.5K.

Employment Change 3M/3M (MoM) – The change in the number of people employed was 6K versus -83K forecast in the three months to June, after changing by 211K in May.

Unemployment Rate (Apr) – The unemployment rate was 3.9% versus 4.7% expected.

10-Year Treasury Gilt Auction – The yield on the Treasury Gilt auctioned continues to decline. Down to 0.224%, from 0.794% in January (07).

Car Registration (MoM) – The number of new passenger car registrations increased by 368.6% from -98.3% in the previous period.

Car Registration (YoY) – As of June 04, car registration had declined by 89.0%, a signal of decreasing consumption.

Core CPI MoM (May) – Core consumer price index is expected to come in at 0.1%. The index rose by 0.1% in the previous period.

Core CPI YoY (May) – Core consumer price index is expected to come in at 1.3%. CPI increased by 1.4%, versus readings of 1.6% and 1.7% in April and May.

Core PPI Output (MoM) (May) – Price is expected to change by -0.1% versus 0.3% in April.

Core PPI Output (YoY) (May) - The Producer Price Index (PPI) is forecast to come in at 0.6%. The reading was 0.9% as of April 22.

Core RPI (MoM) (May) - The Retail Price Index increased by 0.2%(previous) in April, 0.3% lower than actual reading in March.

Core RPI (YoY) (May) - The Retail Price Index increased by 1.6% in May, 1.1% lower than actual reading in April.

PPI Input (YoY) (May) - Producer Price Index (PPI) Input is expected to decrease by 6.0%. Input price changed by -9.8% in the previous period.

PPI Input (MoM) (May) - Producer Price Index (PPI) Input is expected to change by 4.5%, following a 5.1% decline.

PPI Output (YoY) (May) - Producer Price Index (PPI) is forecast to decline by 0.9%, following a previous decline of 0.7%.

PPI Output (MoM) (May) - Producer Price Index (PPI) is forecast to increase by 0.1%, following a previous decline of 0.7%.

RPI (MoM) (May) - The Retail Price Index increased by 0.2% in April, a 0.3% decline on the previous reading. RPI for May is forecast to increase by 0.1%.

RPI (YoY) (May) - The Retail Price Index increased 2.6% in April, a 0.1% decline on the previous reading. RPI is forecast to increase by 1.2% in May.

BoE MPC vote cut (Jun) - The number of MPC members who voted for a cut in the previous rate decision meeting is expected to be 0 (zero).

BoE MPC vote hike (Jun) - The number of MPC members who voted for a rate hike at the previous rate decision meeting is expected to be 0 (zero).

BoE MPC vote unchanged (Jun) – The number of monitory policy committee members who voted for unchanged in the previous rate decision meeting was 9 in May and is expected to remain the same for June.

BoE QE Total (Jun) – Quantitative easing is expected to reach 725 billion in June, following previous figures of 645 billion.

BoE Interest Rate Decision (Jun) – The interest rate is expected to be set at 0.10%, mirroring previous figures of 0.10%.

Core Retail Sales (MoM) (May) - Core Retail Sales month-over-month is expected to edge higher by 4.5%, following a decline of 15.2%.

Core Retail Sales (YoY) (May) - Core Retail Sales year-over-year is forecast to decline by 14.4%, following a decline of 18.4%.

Public Sector Net Borrowing (May) – Public sector borrowing of 47.30 billion is expected, signalling a budget deficit, following the previous borrowing of 61.40 billion.

Public Sector Net Cash Requirement (May) – Public sector cash requirement increased by 89.544 billion (May 22) from 7.750 billion in the previous period.

Retail Sales (MoM) (May) – Month-over-month retail sales expected to improve by 5.7%, following a decline of 18.1%.

Retail Sales (YoY) (May) – In May (22nd), UK retail sales fell by 22.6%, following a sales decrease of 5.8% in April, and is expected to reach -17.1%.

CFTC GBP speculative net positions – The CFTC Commitments of Traders report in the week ended June 12 shows that actual net positions edged slightly lower, to -24.0K contracts from -22.3K.


*For professional clients and qualified investors only

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