Friday FX focus: UK retail sales - RBC Capital Markets

Analyst(s) at RBC Capital Markets provided a brief preview of the upcoming UK retail sales data, due in a short while from now. 

Key Quotes:

"Retail sales round out a busy week of UK data. Consensus is looking for a 0.7%m/m rise in January on the ex auto and fuel measure, but there is a wide dispersion of forecasts (-0.1% to 1.7%m/m). Our UK economists note that December data were relatively weak in terms of the growth rates for the volume of sales. Prices are rising now (the deflator on retail sales moved from -2% y/y in June 2016 to +0.9% y/y by December), so there is more scope to think that the softer growth rates in retail sales volumes can develop into a trend from here. If consumers are having to pay increased prices, volume growth will be harder to come by than when there was deflation in the sector. Volume growth has already slipped from over 7% y/y in October to 4.3% y/y in December, with the consensus estimate for January data today looking for a dip below 4% y/y. As usual though, the outturn on retail sales will have limited significance for us in terms of implications for other economic variables, given its volatile nature. GBP/USD remains rangebound, struggling to break above 1.27 with good support at 1.24. Yesterday two government officials involved in exit planning signalled that PM May intends to trigger Article 50 as close as possible to the EU Summit on March 9-10."