Previous Day's Market Highlights
Sterling stumbled yesterday after data showed that CPI unexpectedly slowed in March to 2.5% from 2.7% in February. Inflation had peaked at 3.1% in November. While this leaves the door open for a hike, investors are now less certain of a May move than they were before, and expectations for the pace of future hikes have fallen back as well, since slower inflation reduces the pressure on the BoE to raise interest rates. This was the final CPI print before the BoE meets on 10 May; the next CPI release is 22 May.
Sterling-dollar fell over 0.7% on the under-forecast release to below 1.42, while sterling-euro lost the 1.15 level. Euro-dollar continued to trade within the 1.23-1.24 band, temporarily losing ground as the final estimate of March CPI in the Eurozone saw a downwards revision to 1.3%.
Sterling-Aussie gave up both the 1.84 and 1.83 levels, and it was unable to regain those levels even as the Aussie weakened overnight on a disappointing jobs report. Sterling-kiwi fell back below 1.95. Sterling’s initial losses against the Canadian dollar were later partially offset by loonie weakness as the Bank of Canada kept interest rates on hold and struck a cautious tone on future hikes.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
UK Retail Sales are expected this morning (09:30 BST) and a mixed set of figures may do little to renew support for the pound after it came under pressure on yesterday’s CPI release. Sales are forecast to have contracted month-on-month but accelerated year-on-year.
In the afternoon, the week’s raft of Fed speakers continues. Quarles will testify on supervision and regulation and Mester will speak about the economic outlook. Elsewhere, MPC Member Cunliffe is speaking at the Global Finance Forum, with a Q&A, but after the European close (17:30 BST).
Overall, however, the calendar is relatively quiet today, which may keep rates in familiar territory.
Today's Economic Calendar
|09:30||GBP||Retail Sales MoM (Mar)||-0.5%||0.8%|
|09:30||GBP||Core Retail Sales MoM (Mar)||-0.4%||0.6%|
|09:30||GBP||Retail Sales YoY (Mar)||2.0%||1.5%|
|09:30||GBP||Core Retail Sales YoY (Mar)||1.4%||1.1%|
|13:30||USD||Initial Jobless Claims (13 Apr)||230K||233K|
|13:30||USD||Philadelphia Fed Manufacturing Survey (Apr)||20.1||22.3|
|14:30||USD||Fed's Quarles Speaks|
|17:30||GBP||MPC Member Cunliffe Speaks|
|23:45||USD||Fed's Mester Speaks|