Daily Market Report - 13/05/2015

U.K. industrial production rose the most since September as oil and gas extraction surged and manufacturing increased for a second month. Output gained 0.5 percent in March from the previous month. In the first quarter, industrial output was revised to a 0.1 percent increase from a 0.1 percent decline, though the ONS said the impact on GDP would be “minimal.”

The data comes before today’s Bank of England Governor Mark Carney will publish new forecasts for growth and inflation. While U.K. economic growth slowed to 0.3 percent in the first quarter, Markit Economics said its industry surveys point to a pickup since then, led by services.

Manufacturing also rose to 0.4 percent in March from February, the ONS said, exceeding the 0.3 percent estimate. Within manufacturing, the monthly increase was led by pharmaceuticals and a broad category that includes furniture and the repair of ships and aircraft. Oil and gas extraction surged 4.9 percent, the most since February 2014.

Carney’s press conference in London will be his first public comments since the surprise May 7 general election result that gave Conservative Prime Minister David Cameron a majority in Parliament. He’ll discuss the outlook for monetary policy and the risks to growth as activity in Europe, Britain’s biggest trading partner, shows signs of recovery.

News emerged yesterday that Greece was forced to use an emergency account to make their debt interest payment to the International Monetary Fund (IMF) on Monday.

The government raided its emergency reserves of 650 million Euro’s, which includes gold, to meet the repayments. This has further raised concerns weeks after Greek finance minister Yanis Varoufakis warned his country was running out of cash. Greece also used 100 million Euros of its cash reserves to make the full payment on its IMF bailout loan interest in response to an appeal for money.  

Key Announcements
EUR - 7:00 - German preliminary GDP is forecast to fall
GBP - 9:30 – Average Earnings Index
GBP - 9:30 - Claimant Count Change
GBP - 10:30 - BOE Mark Carney Speaks
GBP - 10:30 - BOE Inflation Report
USD - 13:30 – Monthly core retail and retail sales figure

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