Interesting Day for UK Economy
Yesterday saw Sterling gain against most currencies with it going above 1.5000 against the Dollar and 1.4000 against the Euro, although it has since fallen back from these highs. The minutes released from the Bank of England yesterday carried a rather hawkish tone and as we know, the markets love the prospect of an interest rate hike, however distant it may be.
In the UK, it could be an interesting day as we look forward to the retail sales figures. This could well be headline-grabbing as we are expecting further growth as private consumption is supported by very high consumer confidence and positive real wage growth. Of course, everything that happens in the UK has the pending General Election in the background and we will also see the public net borrowing figure which could have an impact on whom people choose to vote for.
In the Eurozone, we have PMI figures which are expected to show a continued acceleration of growth in the manufacturing and services sectors. However, it has become increasingly evident that the ECB are on a very certain path and will not be diverted by any data releases. As with the General Election in the UK, the Greek situation is always casting a shadow over what is happening in the Eurozone. Continuous conflicting reports do not help traders’ views of the Euro and nor does the fact that people seem seem to be confused as to when the next deadline actually is.
Lots of data out today as mentioned, with UK retail sales and net borrowing and Eurozone manufacturing and services PMI taking centre stage this morning. This afternoon, focus switches to the US, with manufacturing PMI, jobless claims and new home sales data on the agenda.