Daily Insight

Following on from last Thursday, Retail Sales in the U.S. rose by more than expected in March as an improving labour market and higher household incomes bolstered consumer spending with the average growth rate accelerating to its fastest pace since the third quarter of 2004. There is some significant data released in the U.S. this afternoon with the Producer Price Index set to show a rise of 0.4% in March following a decline of 1.4% in February. The dollar is being hampered as further evidence of a cooling housing market continues to fuel concerns that economic growth will begin to slow into the second quarter, prompting the Federal Reserve to stop raising interest rates. As a result, we traded as high as 1.7730 overnight and a close around this level will look very positive for sterling with the minutes of that last FOMC meeting released this evening.

Sterling may come under pressure this week as speculation that slowing economic growth will prompt the Bank of England to lower UK interest rates following disappointing Retail sales data from the BRC and unemployment rising to its highest level in almost 3 years. The BoE release the minutes of its March meeting tomorrow after electing to hold interest rates at 4.50% for the eighth month in succession. There has already been some positive data released today in the UK today with the average price of a British home rising to a record high for a third month in April, climbing 1.1% to £205,674.

With regards the Euro, the market is relatively unchanged from last week as we continue to trade under 1.4500 and without any significant data released in the euro-zone until tomorrow with Industrial Production and German Producer Prices, we don't anticipate too much movement today.

Data Released 18th April

U.S. 13:30 Producer Price Index - Excluding Food and Energy

U.S. 13:30 Housing Starts (Mar)

U.S. 20:00 FOMC Minutes 28th March meeting

written by Adam Solomon