Daily Market Report - 09/04/2015

Yesterday both the New York Fed President William Dudley and Fed Governor Jerome Powell said the US could still hike interest rates in June despite recent weak US data and investor scepticism. This put the spotlight squarely on the economy's performance in the next two months. Disappointing U.S. jobs growth, manufacturing activity, and retail sales over the winter had pushed market expectations for a rate hike to later in the year. 

However, William Dudley said if the economy is strong, the unemployment rate is dropping, wages are rising, and the outlook is good then there is still a possibility interest rates could be pushed up as early as June. Minutes of the Fed's March 17-18 policy meeting, released yesterday also show central bank officials are eager to get the rate hike process started but are likely to go slow once lift-off begins. Several participants at the meeting said they were virtually certain June would be the right time for what would be the first rate hike since 2006. 

Some participants were more cautious saying they did not think such a move would be appropriate until next year, and would be watching for evidence that the impact of low oil prices and a strong dollar had eased, and that the U.S. economy was continuing to generate jobs.

Yesterday the Greek prime minister risked straining relations with his Eurozone partners further after a meeting with Russia to boost ties between the two countries. It was seen as some as an attempt from Greece to gain a bargaining chip in negotiations with Europe over its bailout. Another possibility was Greece may ask for aid in the form of a loan to help their cash crisis, however, this was quickly dismissed by Putin as Russia is also dealing with its own economic problems due to falling oil prices and economic sanctions.

Euro zone retail sales rose from a year earlier as expected in February, data showed on Wednesday, thanks to higher demand for non-food products and automotive fuel. Retail sales are a proxy for consumer demand, an important component of euro zone gross domestic product which is expected to grow 0.3 percent quarter-on-quarter in the first three months of 2015, up from 0.2 percent in the final quarter of 2014.

Key Announcements
GBP - 12:00: Bank of England Interest Rate Decision expected to remain the same at 0.5%
USD - 13:30: Continuing Jobless Claims expected to rise from 2.325M to 2.356M
USD - 13:30: Initial Jobless Claims expected to rise 268k to 285k 

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