- UK Rightmove house prices April +1.8% m/m, -7.3% y/y, vs +0.9% and -9.0% in March
- UK’s Trade and Investment Minister Davies: Reiterates benefits of weak pound in helping boost UK exports
- BOJ’s Shirakawa: Japan financial conditions remain severe
- Iran’s Judiciary Chief orders “careful and quick” consideration of US-Iranian reporter’s appeal
Sterling weakness is the main feature of trading this morning, cable at one stage down 2 big figures on the day before a slight recovery, while EUR/GBP is up at .8900 from an early .8830.
Sterling is being underminned by the proximity of Wednesday’s Budget Statement and Friday’s Q-1 GDP release, as well as retail sales Tuesday and jobs data Wednesday. These all serve as event risk for sterling, as they will help highlight the parlous state of the UK economy and the Government’s finances.
Analysts believe Chancellor of the Exchequer Darling will announce Government borrowing will hit £160 bln this financial year during his Budget statement.
Risk aversion has been ratcheted higher, with stocks suffering, amid ongoing caution ahead of earnings reports and with worries the global economy isn’t recovering still prevalent.
There are also ongoing worries surrounding the results of stress tests on 19 US banks and the future of the US automakers.
EUR/USD remains weighed down against this backdrop, presently at 1.2975. The market is also busy discounting probable ECB rate cut trim and introduction of quantitative easing May 7. Some also see apparent division among ECB council members over policy as a negative.
