- European session review: GBP weakens as "little progress" in latest EU-UK trade negotiations overshadows better-than-expected UK's economic data
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European session review: GBP weakens as "little progress" in latest EU-UK trade negotiations overshadows better-than-expected UK's economic data
| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|---|---|---|---|---|---|
| 06:00 | United Kingdom | Retail Sales (MoM) | July | 13.9% | 2% | 3.6% |
| 06:00 | United Kingdom | Retail Sales (YoY) | July | -1.6% | 0% | 1.4% |
| 06:00 | United Kingdom | PSNB, bln | July | -28.8 | -29.3 | -25.9 |
| 07:15 | France | Services PMI | August | 57.3 | 56.3 | 51.9 |
| 07:15 | France | Manufacturing PMI | August | 52.4 | 53.7 | 49.0 |
| 07:30 | Germany | Services PMI | August | 55.6 | 55.1 | 50.8 |
| 07:30 | Germany | Manufacturing PMI | August | 51 | 52.5 | 53.0 |
| 08:00 | Eurozone | Manufacturing PMI | August | 51.8 | 52.9 | 51.7 |
| 08:00 | Eurozone | Services PMI | August | 54.7 | 54.5 | 50.1 |
| 08:30 | United Kingdom | Purchasing Manager Index Manufacturing | August | 53.3 | 53.8 | 55.3 |
| 08:30 | United Kingdom | Purchasing Manager Index Services | August | 56.5 | 57 | 60.1 |
| 10:00 | United Kingdom | CBI industrial order books balance | August | -46 | -35 | -44 |
GBP weakened against other major currencies in the European session on Friday as the statements of the top negotiators for the EU and the UK on the latest round of their talks on a post-Brexit trade deal overshadowed better-than-expected data on the UK's retail sales and PMIs.
The latest round of the EU-UK trade negotiations ended with “little progress”. Addressing the press on the latest round of Brexit negotiations, the EU's negotiator Michel Barnier said that the talks "did not move swiftly forward" this week, adding that he is "disappointed" with this progress. Barnier also accused the UK of showing "no willingness" to take on board bloc's priority areas in order to agree a trade deal before the end of the year. "Too often this week it felt as if we were going backwards more than forwards," the EU's negotiator noted. He also added that a post-Brexit trade deal between the UK and the EU "seems unlikely" at this stage.
Meanwhile, the UK's Brexit negotiator David Frost noted that the latest round of trade talks with the EU had been "useful", but there had been "little progress" amid differences on fisheries policy and state aid rules. He also added that "agreement is still possible, and it is still our goal, but it is clear that it will not be easy to achieve.”
The Office for National Statistics (ONS) reported that the UK retail sales rose 3.6 percent m/m in July, following a 13.9 percent m/m surge in June. Economists had forecast sales to advance 2 percent m/m. On a yearly basis, the UK's retail sales climbed 1.4 percent in July, in contrast to a 1.6 percent decline in June. This was better than economists' forecast of zero change.
In addition, the report from the IHS Markit revealed that the UK's private sector expanded at the fastest pace since October 2013 in August as both the manufacturing and service sectors continued to experience a recovery in customer demand. The headline seasonally adjusted IHS Markit/CIPS Flash UK Composite Output Index came in at 60.3 in August, up from 57.0 in July, easily beating market expectations of 57.1. According to the report, service sector activity (index at 60.1) expanded the most since August 2014 and manufacturing activity (55.3) grew the fastest since February 2018.
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