Market Update

This morning we’ve seen a basket of Euro data released from France, Spain and The Euro-Zone. Although preliminary Spanish Inflation data for March suggests a slight rise in prices, Consumer confidence across the bloc improved throughout March with possibilities of an interest rate cut on the horizon. Sticking with Europe, we have some pretty weighted data out tomorrow for Germany, in particular their Retail Sales for February and their unemployment figures for March.

First up with their Retail Sales, albeit still in negative territory it looks as if sales picked up in February and combined with Consumer Confidence we should expect to see further improvements next month. If this was to be the case then it could be expected that Retail Sales move into positive territory for Germany once a rate cut has been implemented. A scenario that over time could potentially bring some much needed strength to The Euro. We also have the eagerly awaited UK GDP figures set to be released tomorrow morning, with current forecasts showing the economy will have retracted in the last quarter, evident in the fact the UK had temporarily entered into a recession.

Elsewhere, The Japanese Yen had dropped to its lowest levels since 1990 earlier this morning, entering similar levels to the 2022 levels that triggered intervention by Japanese Authorities. The Yen has so far this year dropped by more than 7%, mainly driven by the widening gap between U.S and Japanese Bond Yields, which even the small rate hike by The Bank of Japan did little to impact. Japan’s finance ministry is set to hold talks with Japan’s Central Bank later today to announce plans and try to boost the currency.

Next week after the Bank Holiday we have EU inflation figures being released, any further drop in prices will no doubt see the pressure on The European Central Bank mount to bring forward potential rate cuts. Especially after The Swiss National Bank became the first central bank within this rate cycle to cut their interest rates.

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