This afternoon a flurry of US data will be released including the latest Consumer Price Index and Retail Sales data. Both of these readings are key economic indicators, with the CPI data indicating the inflation level in the US. The Federal Reserve Bank in America are watching out for an increase in inflation in order to gauge when the next interest rate hike might be made. At the moment there is an expectation that the meeting in March will be a suitable time however any variation on the expected data could change that.

The Federal Reserve were hoping the inflation rate stayed above 2.0% and in the last few months that has been the case. However the data just after lunchtime today is forecast to fall below to 1.9%. Whilst this is not a major fall there was hope that the inflation level would continue to rise but that no longer looks to be the case.

Consumer Confidence in the US has been high of late and the Retail Sales data are expected to stay the same as last month. The figures for December and January are expected to be significantly lower than November when all the black Friday weekend deals were had last year, it appears that shopping spree has essentially taking over from Christmas sales.

Data releases at the end of the week

To close out the week the latest Producer Price Index and Industrial Production data will be released, all of which add to the economic picture. Finally on Friday Housing Starts and Building Permits will be released which are expected to show improvement on December which is hardly surprising. But once again the US is all about economic performance and this data needs to continue to be improving. The US Dollar has started to strengthen in the last week returning to the 1.38’s after touching 1.45 only 10 days ago against Sterling, at the moment this looks like it will continue.