Germany and France Show Signs of Recovery
The Bank of England Inflation Report is continuing to weigh heavily on Sterling as we have seen a constant weakening since Carney spoke a couple of days ago. Coupled with broad-based Dollar strength and slightly positive data out of France and Germany, things are as gloomy as this morning’s weather for the Pound.
Already this morning we have had GDP out of France and Germany and both sets of data exceeded markets’ expectations. Whilst hardly setting the markets on fire and getting traders whooping with delight, the figures showed a slight increase in GDP and weren’t negative. As we await the results from the Eurozone, this could be viewed cautiously as evidence that the worst may be over as data has started to improve, Bank stress tests have been passed without too much “stress” and money supply has been increased.
In Japan, Prime Minister Abe has called a general election for next month in an attempt to garner support for his economic policies. He has also decided to postpone an unpopular sales tax increase due to the weakness of the Japanese economy.
This morning’s Eurozone GDP is eagerly awaited and this afternoon major market movers will be US retails sales and Michigan Consumer Sentiment Index.
Have a good weekend!