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UK Inflation and US Retail Sales Share The Spotlight

UK Inflation and US Retail Sales Share The Spotlight

Good morning

 

Today is likely to be another volatile one for the markets as 2 data releases share the headlines. This morning we see the latest reading of UK Inflation and this afternoon, our gaze is transferred to across The Pond where March retail sales figures are released in the US.

 

There is lots of speculation surrounding the UK Inflation figures with the majority of onlookers suspecting that for the second month running, there is likely to have been no inflation. Whilst this move is seen as being possibly positive deflation and due to falling energy and food prices, core inflation is expected to remain at a measly 1.2% . If there is an issue here, then the Bank of England will need to spring into action at some point with probably more quantitative easing. As the Bank of England bases the interest rate off the inflation rate, further disappointing data could signal to the markets that a rate hike is even further off than suspected which could adversely affect the Pound.

 

This afternoon, we are expecting to see more positive retail sales data from the US, showing a bit of a recovery from disappointing figures over a bleak winter.  The markets are expecting a 1.1% growth which would be the largest monthly gain in a year. It is hoped that after 3 months of not spending their money due to adverse weather conditions, consumers have been splashing this spare cash.

 

As ever, the Grexit is never too far from the headlines as German newspaper Bild published a story that Syriza could be looking for reelection in order to gain an absolute majority. This would of course, give them renewed vigour and power and be seen as in fact being a referendum on the fate of the Euro.

 

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