There were no major data releases on Tuesday with Sterling initially posting gains as London markets re-opened from the Easter holidays. UK equities posted gains and solid overall risk conditions helped underpin the currency with reduced expectations of UK recession also supportive. The Treasury announced that Megan Greene would be appointed to replace Tenreyo on the Monetary Policy Committee from July. Her public comments indicated that she would be a centrist or relatively hawkish member on the committee and certainty more hawkish that Tenreyro. The IMF raised its UK outlook in the latest update, but still expects that the economy will contract this year and that the UK will be the worst performer in the G20.
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14.00 Andrew Bailey Speech
20.15 Andrew Bailey Speech
The Euro-Zone Sentix investor confidence index improved to –8.7 for April from –11.1 previously and slightly stronger than consensus forecasts of -9.9. According to Sentix, the major upheavals feared as a result of the gas and electricity price crisis in Europe failed to materialise this winter, but it reiterated that there was no reason to sound the all-clear. Overall confidence was still weak in historic terms. ECB council member Villeroy stated that the bank faces the risk of entrenched inflation and that the bank is fully committed.
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The US NFIB small-business confidence index edged lower to 90.1 from 90.9 previously, but slightly above consensus forecasts. The latest US consumer prices data will be important for the Federal Reserve and markets on Wednesday. Consensus forecasts are for the headline inflation rate to decline sharply to 5.2% from 6.0% with favourable base effects having an important impact in cutting the rate. Core prices are forecast to increase 0.4% on the month with the annual rate edging higher to 5.6% from 5.5%. Higher than expected data, especially for core prices would reinforce expectations that the Fed will have to be more aggressive in raising interest rates and potentially support the dollar.
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19.00 FOMC Minutes