Last week was eventful, both politically and economically. Firstly, US labour data last Friday stunned economists’. The Greenback climbed against most of its counter-parties after the release as markets weighed the poor non-farm payroll figure against a bullish unemployment rate. Non-farms posted a weak 98k, whilst the jobless rate registered its best reading in almost a decade at 4.5%.
Over the weekend, the Libor scandal reared its ugly head again. A secret recording by BBC Panorama has implicated the Bank of England. The recording in 2008 has suggested that the BoE repeatedly pressure commercial banks during the financial crisis to push their Libor rates down.
In politics, Donald Trump continued to make headlines last week after the US President launched a missile attack on Syria. The action followed a suspected chemical weapons attack on civilians by the Syrian government. US-Russia ties have been damaged after this act of aggression, as Syria are a close ally to Russia. Markets have remained relatively stable, with a small surge to haven currencies.
A relatively quiet start to the week with only low tier data scheduled for release. The Eurozone see the release of the Sentix Investor Confidence figure focusing on investors and analysts economic outlook on the next six months within the Eurozone. In the States, Fed Chair Janet Yellen will be speaking at the University of Michigan.
The week continues light with the UK CPI the only piece of high tier data released on Tuesday. This is forecast at 2.2% and will be used by the central bank as the inflation target.
The UK’s average earning index will be released on Wednesday, expected at 2.1%. It has posted a worse than expected figure the last two months, so if this follows suit we could see a weaker Sterling Wednesday. Also from the UK, the unemployment rate is released, expected at 4.7%. As the figure has seen little change in the last few months, it is unlikely to be a market mover.
Thursday will see a busy day for the Greenback with the release of the PPI m/m, unemployment claims and the UoM Consumer Sentiment. US PPI is a good indicator of consumer inflation and has posted higher than expected in the last four months. Unemployment claims for the US are expected at 242K. The Prelim UoM Consumer Sentiment, expected at 97.1, is the first of two versions released looking at the current and future economic conditions.
The UK banks will be closed on Friday in observance of Good Friday, although we still have two pieces of high tier data scheduled for release. US CPI and Retail Sales are forecast to remain the same as last month.