This week the inflation data from the US and UK will be closely watched.

UK Inflation

Following the Brexit talks and some turmoil in the cabinet over the last few days, the focus for sterling traders returns to the data this week. On Tuesday is the release of the latest CPI inflation figures, which are expected to remain steady at around the 3% mark.

Rising inflation helped the Bank of England hike interest rates but it’s expected to fall back towards the 2% target level fairly soon as the worst of the pound’s decline no longer forms part of the year-on-year calculations.

US Retail Sales and Inflation

Following the British data we have the monthly CPI inflation and retail sales data dump from the US on Wednesday. Higher gas prices meant a jump in the headline rate, underlying inflation remained a slack. Core CPI rose 1.7% year-on-year in September, flat from the month before. Retail sales bounced 1.6% to record their best gain in two and a half years.

The figures are important for the Federal Reserve’s assessment of the US economy ahead of the December policy meeting, at which the FOMC is widely anticipated to hike interest rates again. Softer inflation has been looked through but the Fed has indicated a bit more concern about the lack of price growth of late.

Last month, the dual release disappointed and was taken as an excuse to sell the USD. However with consensus very much towards the Fed hiking in December and increasingly the strong growth story backing further hikes in 2018, the USD quickly recovered and rallied.

Eurozone Flash GDP

The Eurozone recovery motors on. Or does it? The single currency bloc has been a bright spot this year and the flash GDP estimate on Tuesday is expected to confirm more progress. But whatever the rate of growth in the economy, it seems like there is no rushing the European Central Bank in dialling back stimulus. The preliminary data for Q3 showed growth of 0.6%, ahead of forecasts but could be revised higher if the recent trend for such adjustments is followed.

Wal-Mart

More cannibalisation by Amazon or has Wal-Mart staunched the wound? Shares in WMT have actually managed to keep pace with AMZN this year as rising ecommerce sales have allowed it to mix it online. In August the company said online purchases had climbed 60% during the second quarter of this year.

According to Zacks Investment Research, the consensus EPS forecast for the quarter is $0.97, a marginal fall from the $0.98 reported in the same period a year ago. All eyes are on the outlook after the retail giant said it could expand its US ecommerce business by 40% in fiscal 2019.

For UK investors there is always the added interest of Asda’s performance and what it entails for big FTSE stocks like Tesco, Sainsbury’s and Morrison’s. In August it confirmed Asda returned to positive like-for-like sales in the second quarter.

Source: ETX Capital