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Sterling boosted by bullish retail sales

Today's markets

  • GBP - Retail Sales m/m
  • USD - FOMC Statement
  • USD - Federal Funds Rate

The Pound received an unexpected boost this morning from a bullish Retail Sales posting. Retail Sales was expected at 0.2% but registered at 1%, the fastest growth pace in the past four months. GBP/USD broke through a key psychological level after the release. The bullish reading adds further fuel to the fire for the Bank of England to raise interest rates at the pivotal November meeting.

Brexit negotiations may finally start to make some traction with Theresa May set to offer a 20 billion Euro cash injection to help settle the divorce bill and break the 3-month deadlock of stalled negotiations. It is expected that in May’s speech on Friday she will be offering the financial injection in hope that it will be accepted and the negotiations can move up to phase two. Although May is still going ahead and confident of the Brexit direction, ex-prime minister Tony Blair rates Brexit reversal plans as high as 30%.

This afternoon the US will be releasing its crude oil inventories, expected at $2.8M.  Then, later tonight in the US, FOMC will be giving a statement about their monetary policy which will contain the outcome of their interest rate vote, and will also offer an indication of the economic outlook for the future. It is expected that the Fed will be unwinding its ultra-easy monetary policy which they have pursued since the financial crisis, which would mean that the Fed is confident that the economy can grow without any presidential influence.