GBP Dips as MPC Posen Calls For More QE, ADP Next

German retail sales unchanged, Eurozone CPI and unemployment in line with expectations. GBP weakens as BOE Posen hints more QE. Market turns to US ADP, factory orders, Chicago PMI and Canadian GDP.

German retail sales remained unchanged in July after June’s sales were revised lower from 6.3% to 4.5%. This indicator exhibits high volatility and revisions are often significant. Euro strengthened as analysts expected a contraction of 1.5%.

Annual Eurozone CPI stayed in August at 2.5% in line with expectations. The story was the same with July unemployment rate that stayed at 10%.

GBP dipped after Adam Posen, a Monetary Policy Committee member, was quoted by Reuters that G7 should do more QE to support growth. Next MPC meeting is on September 8th and GBP would be hit should the Asset Purchase Facility be increased.

The New York session will start at 8:15 am ET with August ADP report that is seen at 102K from previous 114K. Lately the ADP indicator proved not to be the best predictor of the NFP but it is still worthy to watch out for a large positive or negative surprise that could potentially indicate the direction of Friday’s NFP.

Canadian June GDP comes out at 8:30 am ET and it is expected to improve to 0.2% from a decline of 0.3% seen in May. Should the GDP contract again, the CAD would likely sell off and weaken especially against currencies that have been strong lately such as AUD or NZD.

At 9:45 am ET Chicago PMI is due and it is expected to decline in August to 54.3 from previous 58.8. July Factory orders come 15 minutes later and are seen at 1.8% from a previous contraction of 0.8%.