The retail sales from America unexpectedly dropped and came out at a bearish -0.4%, with the core reading also falling to -1.4%. Both gauges were expected to remain in positive territory for the month of February, but the impact of the strong Dollar is now evident in the slow down of orders from manufacturing and production surveys. This slowdown in demand is now beginning to show in these durable goods figures and is now likely to continue to be sluggish going forward. This has prompted Wall street economists to lower their growth forecasts for this first quarter. With weak retail sales now adding to the already slow trade and construction spending data, the GDP for Q1 has now been revised down to 1.8% and is the lowest estimate so far. As a result of this the greenback lost ground again against the Euro and the Pound yesterday afternoon after these figures were released.
In the morning Germany, the powerhouse of the Eurozone posted another increase for the IFO business climate index. For the fifth month in a row confidence for companies in Germany rose; up to 107.9 for March, its highest level since July last year. The optimism is far greater for future business developments as the economy continues to expand. As oil prices are cheaper and the single currency is weaker it is expected to see another solid quarter of GDP growth for Germany.
Today firstly from the U.K, the monthly retail sales are released with the figure forecast to improve from -0.3% up to 0.4%, followed shortly after with the CBI realized sales. From the States the weekly unemployment claims is released and is to remain at 291k. Finally Mark Carney, the head of the BOE speaks in Frankfurt where any insight into when rates could increase or decrease could see volatility for Sterling.