Busy week of economic data ahead

Increased tensions between the US and North Korea dominated markets last week, with equities falling (European stocks were off 3% while US indices were down 1.5%), core bonds benefiting from a flight to quality (10-year yields were between 8-10bps lower), and the so-called ‘safe haven’ currencies (Swiss franc, Japanese yen) strengthening

The euro was also generally on the front foot. It gained around half a cent against the dollar to close out the week trading at $1.1825, and rose to almost 91p against sterling (and so not far off its post Brexit vote high of just over 91p last October)

The annual rate of CPI inflation in the US edged up to 1.7% in July according to data published on Friday, having fallen in each of the previous three months, while the core rate remained unchanged for a third month running at 1.7%

It’s a busy week ahead for economic data, which includes CPI, retail sales (both for July) and the second quarter labour market report in the UK. Euro area GDP and CPI are also due while retail sales are published in the US. In addition, the ECB and Fed release the minutes of their most recent policy meetings