In testimony to the Treasury Select Committee, Bank of England Governor Bailey stated that the bank was in a period of very heightened tension and alertness and that the bank remained vigilant. He also added that credit conditions had tightened, but that this was not a major issue at this time. Bailey’s overall tone offered some reassurance over the UK financial sector and Sterling held a firm overall tone with limited corrective retreats. The stable tone in global risk conditions also helped to underpin confidence in the Pound. The UK currency regained against the dollar and advanced to highs at the European close. Tight ranges prevailed on Wednesday with Sterling gaining further net support from stable risk conditions. Markets will continue to monitor banking-sector and risk developments in the short term.
No Key Data
The Euro held a firm tone after Tuesday’s open with the US dollar tending to drift lower as markets focussed on potential yield trends. Overall risk conditions were also solid with investors cheered by the absence of any negative developments in the US or European banking sectors.
No Key Data
US consumer confidence strengthened to 104.2 for March from a revised 103.4 the previous month and comfortably above consensus forecasts of 101.0. There was a decline in the present conditions component, but this was offset by a recovery in the expectations index. The expectations index, however, has been below 80 for 12 of the last 13 months which is often a signal of recession within the next 12 months. The Richmond Fed manufacturing index recovered to –5 for March from –16 previously and above market expectations of -10. Shipments moved into positive territory for the month, but new and unfilled orders continued to decline. There was a net decline in employment for the month with wage pressure easing slightly. Upward pressure on costs eased, but with a slightly faster pace of selling-price increases.
No Key Data