Focus On Cable
Cable was the headline of yesterday as Sterling showed strength against a weaker US Dollar which has been impacted over the past few days by a flurry of weaker than expected data. Yesterday it was housing starts which came in as weaker than expected. This was then followed by comments from Atlanta Fed President Dennis Lockhart who commented on an interest rate hike being unlikely to happen in June due to this latest run of poor data.
In the UK, things are looking a little rosier and we are looking to expand but the underlying caution of political uncertainty and the stuttering Eurozone economy are still major concerns. Although, it is thought that the election risk has been priced into the markets, there is still the probability of further volatility, especially when we start to see opinion polls come through on a daily basis. One thing that probably shouldn’t be on the agenda is an interest rate hike as the economy is hugely dependent on consumer spending and mortgages.
The Greek crisis is rumbling along with the Greek Finance Minister currently in the US and maintaining that they would be willing to compromise in order to ease their current situation.
Expect it to continue to be volatile today as we have CPI from the Eurozone and US and unemployment and earnings data out of the UK.