• Italy hit by 6.3 magnitude earthquake Northeast of Rome. Death toll mounts
  • UK new car registrations down 30.5% y/y in March
  • ECB’s Quaden: ECB still has room to move on rates, also reflecting other measures
  • ECB’s Bonello: Have to consider all options when interest rates at very low levels
  • Euro zone sentix investor confidence index -35.3 in April, up from -42.7 in March, and better than median forecast of -40.4
  • Institute of Fiscal Studies (IFS) UK deficit “more than predicted.” Says UK’s deficit about 2.7% more than Chancellor acknowledged in the pre-Budget report
  • Euro zone February retail sales -0.6% m/m, -4.0% y/y, weaker than expected, median forecasts -0.4% and -2.5% respectively. January data revised up, to -1.7% y/y from -2.2%
  • Euro zone February PPI -0.5% m/m, exactly as expected, -1.8% y/y, weaker than expected compared to median forecast of -1.5%. January data revised down, to -1.1% m/m and -0.7% y/y from previous -0.8% and -0.5% respectively.

The morning started off with improving risk sentiment very much to the fore, the likes of euro,cable, aussie, canadian dollar prospering, while yen, swissy struggled. The process has certainly slowed through-out the morning with the euro, cable giving ground.

The euro hasn’t been helped by comments from Quaden and Bonello, which have helped re-highlight likelihood of ECB quantitative ease coming down the pike. The release of weaker than expected euro-zone retail sales and producer prices have also knocked the euro a little. Confirmation of recent euro sales by Eastern European central banks (Latvia/Poland), in support of their currencies with more likely to be coming, has also had a marginally negative impact although the amounts involved aren’t huge.

Cable meanwhile has given up about half a cent on the day. The Institute of Fiscal studies, highlighting the fact that the UK deficit is going to be more than the Chancellor forecast, has helped knock back sterling a little. New car registrations for March, down a hefty 30.5% y/y, also haven’t helped.

The yen has also regained a little lost ground, USD/JPY down at 101.15 from an earlier 101.45 high. Reports of Japanese exporters lined up at 101.40/50 at play here.