Daily Market Report – 27/04/2015

GBP
The Pound had a mixed session yesterday after disappointing retail sales
figures were offset by a positive government borrowing figure, providing a
varied set of data as parties spar over the economy in the run-up to the
general election. The poor retail sales figure is believed to be a backlash of
consumers being maxed out after taking advantage of the discount-fuelled
frenzies we saw over the festive period. Despite the disappointing retail

GBP
The Pound had a mixed session yesterday after disappointing retail sales
figures were offset by a positive government borrowing figure, providing a
varied set of data as parties spar over the economy in the run-up to the
general election. The poor retail sales figure is believed to be a backlash of
consumers being maxed out after taking advantage of the discount-fuelled
frenzies we saw over the festive period. Despite the disappointing retail
figures, the Pound was boosted by separate figures showing the budget deficit
narrowed more than officials estimated after Britain posted the smallest
shortfall for 11 years.
 
Government borrowing fell to £7.4bn in March, taking the total for the
financial year to £87.3bn, well below the £90.2bn figure estimated by the
independent Office for Budget Responsibility and £11.1bn lower than last year’s
total. The timely figure was perceived by analysts as demonstrating the good
the current government has done for the economy. 

EUR
The Euro fought back in the afternoon after
French and German manufacturing came in significantly below forecast first
thing. Both figures signalled an easing in the rate of expansion of private
sector output to near stagnation in April. Analysts believe this weaker
Euro-zone expansion is a sign that bond purchases by the European Central Bank
will take time to revive a fragile recovery. While ECB President Mario Draghi
has already pointed to some positive effects created by the 1.1 trillion euro
plan, he has also cautioned that the region’s recovery won’t be sustainable
without government reforms. Investors have begun to lose some of their
confidence in the performance of Germany, Europe’s largest economy, as global
weakness damped export prospects.


USD
The Dollar weakened after unemployment claims came out above forecast, despite
holding below 300,000 for the seventh straight week, pointing to a rebound in
payrolls after hiring eased last month. Muted firings are helping boost
prospects of a healthy labour market even as employers slowed hiring in March
amid weaker foreign demand, chillier temperatures and fallout from the West
Coast port workers’ dispute. Projections for more robust employment growth
ahead may keep Federal Reserve officials on course to raise the benchmark
interest rate this year for the first time since 2006.

Key
Announcements
EUR: Eurogroup meetings happening all day
9:00  – EUR – German IFO business climate
1:30 – USD – monthly core durable goods orders 

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