Market Update

There is no key economic data today that would affect the GBP against other major currencies, so we expect a stable market today as a whole;

However on Tuesday we have German Producer Price Index which is expected to be strong for the Eurozone showing an improvement from -0.3% last month to 0% showing that consumers are spending again, this should strengthen the Euro providing these results come in as expected.

At 8:30 we have GBP data, it’s the CPI (Inflation) figures and as expected the inflation figure should come in around the 1.6/1.7% which is good news for the GBP as its shows that inflation is below the target of 2% and it has not dropped off to drastically.

Also on Tuesday we have the RPI (Retail Price Index) figures, we are expecting this to be strong showing an increase of 0.3% from the previous month’s figures. This will indicate that household spending is up which shows an increase in spending and should put confidence into the market.

Moving onto Wednesday morning we will hear the results of the minutes from the BOE meeting held on 7th and 8th of May. They kept the interest rates at a record low of 0.5%. The minutes may provide an insight into divisions over the amount of spare capacity for the economy.

Also we have the GBP Retail Sales figures month on month, this shows the change in volume of sales for retailers in the UK and is expected to be up from 0.1% to 0.5% showing again that spending is up in the UK boosting the confidence.

The US Fed release minutes from their FOMC meeting at 6:30, which will give us more insight into interest rate decisions and further tapering of their QE.

On Thursday there is no key data from the Eurozone that should really have an effect on the rates, however we have the UK GDP data released which is expected on par to the previous quarter at 0.8% showing that the economy is growing.

Coming into the last day of the week on Friday there is no UK data. However the Eurozone are expecting very strong data from the German GDP figures showing an increase of 0.4% from the previous quarter, we expect if the figures meet the expectations then the Euro should gain against the pound.

If you are buying euros from pounds we believe that Tuesday and Wednesday will be the best time to buy, as by the end of the week we expect that rate could drop off.

As ever, if you do require further analysis on the markets then please don't hesitate to contact me directly.