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Missiles are coming, but who knows when?

Missiles are coming, but who knows when?

The Bank of England credit conditions survey suggested that unsecured loan lending standards had been tightening considerably in the quarter to date which should continue to curb underlying consumer spending growth.

David Davis, Brexit Secretary, stated that virtually nothing would change for businesses during the transition period which fed hopes that reduced uncertainty would underpin investment intentions; therefore, underpinning Sterling sentiment. The Pound received a leg-up from a substantial buy order and stop-loss Euro selling triggered after the rate broke through 1.1495, triggering further net UK support as the Euro traded at the lowest level since June 2017.

Sterling benefited from increased global risk appetite as oil prices were broadly resilient and expectations of a May rate hike continue to provide underlying support to the Pound.


US initial jobless claims fell to 233k from 242k previously as US export prices rose 0.2% m/m in March while rising 3.4% over the year. Import prices were little changed from February, rising 3.6% over the year in March.

The FOMC minutes were released last night which will give the Dollar some support going forwards with members pushing for a more aggressive rate hike cycle. The main take-away from the minutes is that policymakers are growing increasingly confident in the US economic outlook. FOMC members took note of the poor start to the year but are optimistic that Trump’s tax reforms will boost the economy over the coming years. With this, members predict the economy to grow at a faster rate up to 2020 with unemployment set to fall further.

Finally, geopolitical risks arise once more with the US military involvement in Syria nearing. Trump has kept everyone guessing with a tweet: “Never said when an attack on Syria would take place. Could be very soon or not so soon at all!”

All in all, the Dollar index recovered from recent slumps whilst the currency strengthened against the Euro to lows of 1.2303. Cable, however, continued to push higher above the 1.4200 handle.


The Euro is weak, down 0.4% versus the US Dollar and 0.5% against the Pound after the latest European Central Bank (ECB) minutes showed some board members view the Euro appreciation as “a source of concern”, as is the risk of a full-fledged trade war with the US. They remained cautious on the improvement in inflation that rose to 1.4% last month, with broad agreement that progress is not yet sufficient.

The Minutes revealed concerns over the risk of trade conflicts and sustainable inflation, all this against the backdrop of recent Euro appreciation. Adding to the dovish minutes, the ECB’s Coeuré said that the current monetary policy stance is appropriate, fueling expectations that the central bank is more likely to maintain the status quo longer than anticipated and prompted some additional weakness.

Data to Watch:

07:00 EUR Harmonised Index of Consumer Prices (YoY) (Mar)
13:00 USD Federal Reserve Bank of Boston President Rosengren Speech
14:00 USD Fed’s Bullard speech
15:00 USD Michigan Consumer Sentiment Index (Apr)
18:00 USD FOMC Member Kaplan Speech
18:00 USD Baker Hughes US Oil Rig Count

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