Daily Insight

There is a glut of significant data released today on both sides of the Atlantic and we can expect to see further market volatility after the Dollar fell significantly against the majors yesterday afternoon amid the appointment of Hank Paulson as the new U.S Treasury secretary and the release of Consumer Confidence data for the month of May, which showed that rising energy prices will point to weaker economic growth and slower spending in the second half of the year. The figure came in slightly above market expectations but still posted the biggest decline in eight months as the Conference Board's Index fell to 103.2 from the four-year high of 109.8 in April. The focal point of today in terms of U.S data released will be the minutes of the Federal Reserve's last policy meeting where investors will be looking for any clues that inflationary pressures will lead to policy makers raising interest rates again in the coming months.

There is a host of significant data released in the UK this morning with Nationwide House Prices showing only a modest increase of 0.2% in May and following the slowdown in prices last month, the UK housing market looks to be cooling after strong gains in the first quarter of the year. In addition, UK Consumer Confidence is widely expected to show a partial improvement in the last month. Higher utility bills and rising energy costs affect sentiment and this is reflected in the recent collapse of consumer credit, which posted the weakest growth in over 12 years in the figures released last month. it is anticipated that the data released this morning will remain weak. Finally, UK Mortgage Approvals are expected to slide further to 113,000 for the month of April compared with 120,000 just three months earlier as higher unemployment and sky-high property prices have discouraged first-time buyers.

With regards the Euro, there was some positive data released in the euro-zone yesterday as the M3 survey showed that money supply throughout Europe increased by the most in three years last month as economic growth fuelled a surge in loan applications, reinforcing concerns that the ECB will need to raise interest rates from the current 2.50%. There is some significant data released this morning in the euro-zone with French and German unemployment data widely anticipated to show a marginal improvement in the last month and therefore, European Consumer Confidence is expected to remain relatively unchanged in May.

Data Released 31st May

UK 07:00 Nationwide House Prices (May)
UK 09:30 Mortgage Approvals (April)
UK 09:30 Consumer Credit (April)
UK 11:00 Consumer Confidence (May)
UK 11:00 CBI Distributive Trades (May)

EU 10:00 Flash HICP (May)
EU 10:00 Sentiment Index (May)
- Industrial/Consumer Confidence

U.S 13:15 ADP National employment report
U.S 15:00 Chicago PMI (May)
U.S 19:00 FOMC Minutes - (10th May)

written by Adam Solomon