Daily Insight

We experienced a relatively quiet day yesterday as Sterling stood firm amid suggestions that House Price inflation across the UK slowed in February, according to the office of the Deputy Prime Minister, despite recent surveys from Halifax and Nationwide stating the opposite. In addition, Input and Output Producer Prices came out in line with expectations at 13.1% yesterday, while output prices were down 2.5% from 2.9% in February. We have already seen the release of the BRC Retail Sales survey this morning in the UK, which largely came out as expected, showing a further decline in consumer spending due in part to a late Easter period and a rise in household utility bills. In addition, the UK Global Trade Balance is released this morning and forecasters are anticipating that the deficit for goods and services has widened to £5.8 Billion in February.

In the past 24hrs, the Euro has been given a boost following comments from the ECB's Klaus Liebscher that the central bank is likely to raise interest rates in June after the chairman, Jean-Claude Trichet, announced last week that rates would remain at 2.50% in May. We have some significant data released this morning in the Euro-zone with the German Investor's Confidence report expected to show a sharp increase to 65.0 in April from 63.4 last month.

With regards the Dollar, we continue to hold steady above 1.7400 this morning and without any significant data released in the States until tomorrow with the U.S. Trade Deficit, we don't anticipate too much market movement throughout the course of today. However, with the economy accelerating faster than anticipated in the first quarter, the 2006 U.S growth forecast may increase following a steady increase in consumer spending and household income.

Data Released 11th April

UK 09:00 Global Trade Balance (Feb)

GER 10:00 ZEW Expectations Balance (April)

written by Adam Solomon