Fundamental Data Back in Focus

In the UK last week exports rose marginally by 0.1% for the month while imports dipped by 0.7%, reducing the trade deficit for February to £4.86Bln – down from the January number of £5.35Bln. Industrial and manufacturing production numbers outstripped the forecasts and GDP for the month of February was printed at 0.2%, beating the forecasters 0% prediction.

The Pound

The pound, however largely ignored all the data and any Brexit talk, trading in a narrow range for the week. The currency has started to look de-sensitised to the Brexit story and is not reacting as erratically to day-to-day chatter around the situation.

This week, we have a break in the Brexit debacle as the UK Parliament have a week off for the Easter period. This should shift the focus to economic/fundamental data this week. On Tuesday we have employment numbers and average earnings figures and consumer price inflation for March on Wednesday.

Euro

In Europe last week, Mario Draghi and the ECB members left interest rates unchanged but in his press conference delivered a dovish assessment of the currency situation. He cited geopolitical uncertainty and the Brexit situation as a drain on the EU economy. He did say the Bank would continue its accommodative stance to monetary policy as long as needed.  

This week the focus will be on the ZEW sentiment survey in Germany, the inflation numbers on Wednesday and PMI surveys on Thursday.

US Dollar

In the US, inflation outstripped forecasts with prices increasing on average by 1.9% however this was counter balanced by the poor Michigan sentiment survey dropping for the month. Donald Trump continued to express his dissatisfaction with the Fed policy of increasing rates and the impartiality of the Fed.

This week the main event is the retail sales numbers due out on Thursday.

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