There were no significant UK developments during Friday. Sterling posted strong gains during the day with net support from gains in equities. The UK currency also broke through two key technical levels which boosted sentiment and triggered further buying. There was also a significant impact from month-end position adjustment. The Euro also dipped against Sterling as Pound sentiment held firm. UK markets were closed on Monday with Sterling retreating against the dollar. BRC data recorded an 8.8% increase in shop prices in the year to April from 8.9% previously.
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Euro-Zone GDP increased 0.1% for the first quarter of 2023 and slightly below consensus forecasts of 0.2% with the year-on-year increase held to 1.3% from 1.8% and marginally below expectations of 1.4% with little net impact. German consumer prices increased 0.4% for April with a slowdown in the annual rate to 7.2% from 7.4% and slightly below expectations of 7.3%. The Euro overall was unable to make any impression and drifted lower into Friday’s New York open.
Key Data
9.00 ECB Bank Lending Survey
10.00 Core Harmonised Index of Consumer Prices (YoY) (Apr)
10.00 Harmonised Index of Consumer Prices (YoY) (Apr)
The US PCE prices index increased 0.1% for March compared with consensus forecasts of 0.3% with the annual increase declining sharply to 4.2% from 5.1%. Core prices, however, increased 0.3% on the month with the annual increase slowing only marginally to 4.6% from 4.7% and above market expectations of 4.5%. The employment cost index increased 1.2% for the first quarter from 1.1% previously with a limited slowdown in the annual increase to 4.8% from 5.1%. Over the weekend, the FDIC took control of First Republic Bank as deposit outflows continued. The FDIC then held an auction and announced Just after Monday’s European open that the assets had been sold to JP Morgan. The move provided some relief for markets.
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