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UK house prices increased 0.5% in November, falling short of expectations of a 0.8% rise
The Halifax house price index rose by 0.5% in November, slightly missing expectations of a 0.8% rise, following a growth of 1.1% in October. This marks the second consecutive month of rising prices due to a shortage of homes to match the demand.
There was little currency market movement yesterday. However, this morning, the pound made marginal losses against the US dollar ahead of US unemployment data, which the pound appears to be at the mercy of for lack of UK data.
The US trade gap widened to $64.3 billion in October – the highest in three months – reflecting an increase in the goods deficit and services surplus.
The number of hires from private businesses in the US came in at 103k in November, lower than 106k in October. The goods and services industry reported declines, while the manufacturing industry cut the most jobs overall.
European economists applauded yesterday as retail sales figures broke their four-month streak of declines in October, increasing 0.1% month-over-month, despite falling short of expectations of a 0.2% rise. Consumer demand remained unchanged from the previous month and the sales of food, drink and tobacco fell by 1.1%, the biggest drop since March.
German factory orders declined 3.7% in October, following a 0.7% rise in September, and compared to forecasts of a 0.2% gain. This suggests fragility in the industrial sector as orders declined across the board.
Speaking yesterday at a press conference, Andrew Bailey, governor of the Bank of England, spoke about AI in response to a question from the Guardian. He said, “We obviously have to go into AI with our eyes open… It is something that we have to embrace with our eyes open… If you’re a firm using AI, you have to understand the tool you’re using.”
The Bank of England and the Financial Conduct Authority are said to be launching a consultation paper to review artificial intelligence learning amid fears the rapidly developing tech could pose a risk to the UK’s financial stability.
On a similar note, Google reported yesterday that its new AI model, Gemini, outperforms Open AI’s ChatGPT model in most tests. The model is being released in the US as an upgrade to Google’s chatbot, but it is not yet available in the EU or the UK.
Later today, we’ll receive GDP estimates for the euro area in the third quarter of 2023. Economists expect the economy to shrink by 0.1% during this period, but the year-on-year rate is forecast to remain positive, at +0.1%.
Tomorrow, the spotlight will be on the US as non-farm payrolls and the US unemployment rate are due to be released at 1:30pm (UK time). The US economy is expected to have added 160k jobs in November 2023, and the unemployment rate is forecast to remain unchanged at 3.9%.
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GBP: Shortage of homes affects demand
Kim Kinnard, director at Halifax Mortgages said, “The resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand.”
GBP/USD: the past year
EUR: German inflation tomorrow
Tomorrow morning, (7 am UK time) German inflation figures will be released. Economists forecast the annual rate to fall from 3.8% to 3.2%, while the monthly rate is expected to lose 0.4%. Should Germany’s consumer price inflation drop to 3.2%, it will be the lowest rate seen since late 2021.
USD: Stocks flatlined in Wednesday’s session
Yesterday, all three major US stocks, the Nasdaq, S&P 500 and the Dow Jones pared gains to flatline as energy shares dropped as oil prices slipped by 3% following concerns surrounding supply.
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