Summary:

• US consumer sentiment pulls back
• Uni Mich drops more than forecast; prior revised lower
• GBPUSD moves off lows after Trump dismisses tough trade talk

The final economic data of the week of note has come from the US, and it suggests that the mood amongst consumers may be declining somewhat. The preliminary University of Michigan consumer sentiment index fell to its 2nd lowest reading this year in falling to 97.1 (98.1 exp) and the prior reading was also revised lower; now standing at 98.2 from 99.3 previously. 

 Today’s UoM data supports the recent pullback in the CB equivalent and while both remain at high levels compared to the rest of this decade relatively speaking, they may be turning lower. Source: xStation

 Part of the survey from Uni Mich focuses on inflation expectations and there was also lower readings here. The 1-year inflation forecast slipped to 2.9% from 3.0% prior while the 5-10 year metric came in at 2.4%. Taken together this is obviously a fair size disappointment and could be seen as offering little support to the US dollar which remains higher on the day and is looking to post a solid week of gains. 

 The US dollar remains firmly higher on the day, with only a handful of EM currencies making any notable gains against the buck. Source: xStation

Shortly before the data was released US president Trump and UK PM May held a join press conference from her Chequers residence in the UK. We earlier noted some weakness in the pound following press reports that Trump had said a UK-US trade deal was like dead following the recent moves towards a softer Brexit. However, Trump dismissed these remarks during this afternoon’s speech, saying that after discussing it with PM May he now believes a deal is possible. May went further saying that she sees a free trade deal with the UK and US and also that there is no limit to the UK’s ability to do trade deals around the world on the basis of the Brexit blueprint which was planned at Chequers last Friday. 

 

 GBPUSD has moved off its lows and recovered much of the earlier decline following Trump’s comments on trade. The region around 1.3030 remains potentially key longer term support. Source: xStation