BoE minutes lift Sterling

Yesterday’s markets

23rd April 2015

  • AUD CPI 0.2%
  • GBP Bank rate vote 0-0-9
  • EUR Italian retail sales -0.2%
  • USD HPI 0.7%
  • EUR Consumer confidence -5
  • USD Existing home sales 5.19m

Yesterday the Pound pushed higher across the board as the BoE minutes revealed a more hawkish tone than expected. There was another unanimous bank rate vote but the rhetoric revealed that all MPC members agree that the next move likely to be up; with two member’s saying decisions were finely balanced this time around. It is also likely that we may see a faster pick up in inflation due to weaker GBP/USD. However, the MPC also agreed that wage growth in the UK remains relatively weak.

Crossing the pond to the US, the existing home sales proved to be encouraging, rising 6.1% MoM in March to be 10% higher than a year earlier. This was firmer than the market had expected. Data continues to be under scrutiny as the FOMC has stated the decision on when rates increase will depend on future economic readings.

Overnight there was some less encouraging news from Asia as manufacturing data from both Japan and China disappointed. In China the HSBC manufacturing PMI fell to a 12 month low of 49.2 indicating a contracting sector. Japan’s manufacturing also shrank for the first time in 9 months which is not positive for the overall global picture.

Today’s markets

22nd April 2015

  • EUR French flash manufacturing PMI
  • EUR German flash manufacturing PMI
  • EUR Flash manufacturing PMI
  • EUR Flash services PMI
  • GBP Retail sales
  • USD Unemployment claims
  • USD Manufacturing PMI

 

We have a very busy day of data. In Europe we have both the PMI data for both the service and manufacturing sectors. Further key readings from the UK come in the form of the retail sales and public sector borrowing (which could eventually weigh on MPC member decisions for a rate increase). Finally from the USD the weekly jobless claims and the manufacturing data is due for release.