Key Points
UK Inflation remained above 10% for the 7th straight month.
Low volatility across G10 currencies.
US GDP set to drop to key level of 2%.
Market Update
GBP
The pound traded largely unchanged against both the USD & EUR last week, as volatility remained pitifully low across the G10 FX market, and other asset classes
Despite this, last week did bring a busy slate of UK economic releases, including inflation remaining above 10% for the 7th consecutive month, and unemployment continuing to rise, as consumer spending slows; this rather grim mix signals stagflation, but also another 25bps hike from the BoE on 11th May
Looking ahead, this week’s economic calendar is substantially quieter, with no major releases due, besides Tuesday’s public sector borrowing data, perhaps meaning another quiet week lies ahead for the quid
EUR
The common currency also trod water last week, with the EUR again lacking any impetus to break north of the $1.10 handle, despite a plethora of ECB speakers once again making rather hawkish remarks
It was also a big week for economic data on the continent last week, with the the latest PMI surveys again highlighting a widening manufacturing-services divergence in the bloc’s economy – the former index fell to a 35-month low, while the latter sector expanded at its fastest pace in a year
This week, the economic calendar is again a little more subdued, with Friday’s Q1 GDP reading the highlight, though the data is significantly lagging, hence near-term market impact is likely to be limited, barring a major downside surprise to deter the ECB from its present policy path
USD
In keeping with the broader market theme last week, the USD traded in a rather uninspiring manner, though the DXY did manage to notch its first (very modest) weekly gain in 6, providing dollar bulls with a modicum of relief after a torrid time of late
The greenback appeared to benefit from a modest rise in Treasury yields, led by the front end of the curve, as the market’s worries about inflation persisted, particularly after the PMI figures on Friday pointed to the fastest rate of price increases since last August
Turning to the week ahead, the first estimate of Q1 GDP is the major economic release, especially the core PCE inflation part of the report; consumer confidence and the latest durable goods orders figures are also due
World News
Credit Suisse has announced that $55bn left the bank during the first quarter this year. Clients began pulling their money after the bank was caught in the market chaos following the collapse of Silicon Valley Bank. The bank had also announced its hardest year since 2008 in 2022, reporting a loss of 7.3bn Swiss Francs and facing a string of problems including money laundering charges. The UBS takeover is set to be confirmed soon.
Countries have began evacuating citizens from Sudan as fighting has escalated to deadly shooting and shelling’s between the opposing forces. The World Health Organization says more than 400 have died, but it is strongly believed that the death toll is much higher. Thousands of foreign citizens and diplomats have been evacuated and airlift operations are continuing.
Data Releases
| Date | Region | Release | Previous | Consensus |
| Tuesday 25th April | US | CB Consumer Confidence | 104.2 | 104.1 |
| Wednesday 26th April | AU | CPI y/y | 6.80% | 6.60% |
| Thursday 27th April | US | Advance GDP q/q | 2.60% | 2.00% |
| Friday 28th April | EU | German Prelim CPI m/m | 0.80% | 0.60% |
| Friday 28th April | CA | GDP m/m | 0.50% | 0.20% |
Indices
| Share Index | Prev. Close | Open |
| FTSE100 | 7914.13 | 7914.13 |
| DAX | 15881.66 | 15852.27 |
| CAC40 | 7577 | 7545.6 |