Daily Insight

Sterling stood firm yesterday after the news that the number of Britons out of work and claiming benefits rose by almost double market expectations in March while UK Average Earnings in the three months to February climbed to 4.2% year-on-year against the 3.6% forecasted. The March claimant count showed an increase of 12,600 new claims last month while analysts were anticipating a rise of 6,500, pushing the unemployment rate up 3.0%, the highest level since October 2003.

The Euro weakened against Sterling yesterday as the European Commission cut it's forecast for economic growth in the euro-zone as rising oil prices and higher interest rates harm consumer spending. The economy will expand 0.6% in the first and second quarters of the year and 0.5% in the third after the EC forecasted a 0.7% growth rate just last month.

With regards the Dollar, the U.S Trade deficit narrowed by more than anticipated to $65.7 Billion in February from the record gap last month, led by a temporary decline in Chinese imports. The Dollar was largely unaffected on release of the deficit as the 4.1% drop from January did little to ease demand for sanctions. There is some significant data released in the States this afternoon with U.S Retail Sales predicted to show a 0.4% rise last month, due primarily to an improving labour market and a pick-up in consumer spending. The Dollar may strengthen if the figure is released in line with expectations as speculation will increase that the Federal Reserve will lift borrowing costs twice more this year.

Data Released 13th April

EUR 09:00 ECB Monthly Bulletin
UK 11:00 BCC Quarterly Manufacturing Survey (Q1)
U.S 13:30 Retail Sales (Mar)
U.S 13:30 Initial Jobless Claims (w/e 8th April)
U.S 14:45 Michigan Sentiment (April Prelim)
U.S 15:00 Business Inventories (Feb)

written by Adam Solomon