The latest ONS data indicated that consumer spending based on card-payment data was strong in the final week of March, although the data is prone to volatility. Bank of England chief economist Pill looked at underlying questions surrounding monetary policy and doubted that quantitative easing would be a realistic policy option if inflation was too high, but there were no comments on current monetary policy with limited moves in the currency. Sterling was unable to make any headway during the day with a more cautious tone surrounding risk appetite a key element holding back potential currency support.
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German industrial production increased 0.2% for February and slightly above market expectations, although there was a downward revision for January. Euro-zone retail sales increased 0.2% in February with a year-on-year increase of 5.0% from 8.4% previously. The data had little market impact, but Euro developments remained important. There was an element of caution ahead of Sunday’s French Presidential election with opinion polls indicating only a narrow lead for President Macron. The Euro was initially able to resist further selling and was able to secure a limited recovery, especially on the crosses.
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US initial jobless claims declined to 166,000 in the latest week and well below consensus forecasts of 200,000. The data for the previous week was revised sharply downward to 171,000 from the originally reported figure of 202,000. Continuing claims, however, increased to 1.52mn from a revised 1.51mn with the previous week’s figure revised sharply higher. Although there appeared to be significant distortions in the data, the evidence sill indicated a tight labour market. There were further concerns over a prolonged conflict in Ukraine as Russia continued to build-up forces near the Eastern border in preparation for an onslaught on the Donbas.
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