Good Morning,

The Pound has come under renewed pressure this morning following the largest quarterly drop in retail sales in the UK since 2010.

Sterling has had a stellar week thus far following PM May’s surprise snap election call which MP’s voted in favour for by 522 votes to 13 against on Wednesday, however, the retail sales data this morning has reversed this trend. The data released by the National Statistics has shown a huge decline in sales by -1.8% in March following an increase of 1.7% in February. Looking at the data from a wider view, year over year figures have slowed to 1.7% versus 3.7% for the same period last year.

Yesterday the Bank of England Governor Marc Carney delivered a speech at the Institute of International Finance in Washington where he said that “financial regulations implemented after the global financial crisis should be able to transform in accordance with unexpected changes”. He also stated that the Bank of England would stick to a “dynamic” approach towards financial regulations, ensuring the global financial system’s stability. Meanwhile, over the pond in the US, Donald Trump started the process of creating new financial regulations, arguing that financial restrictions are hampering economic growth in the US.

US manufacturing data from the Mid-Atlantic region showed that activity slowed markedly in April as the Philadelphia Federal Reserve reported its Manufacturing Index dropped to 22.0 in the reported month, following March’s reading of 32.8; falling behind analysts’ expectations for a decrease to 25.6 points. Analysts stated that business optimism prompted by Donald Trump’s win in the presidential election may have started to fade, putting downward pressure on business activity in the said region.

Markets remain concerned about the French presidential election on Sunday as opinion polls have for months shown far-right leader Marine Le Pen and centrist Emmanuel Macron qualifying for the May 7^th run-off.

Data releases due today:

Friday

8.00 am – 9.00 am – French, German, Eurozone manufacturing PMI’s (April, flash). All better than expected, showing growth

9.30 am – UK retail sales (March): forecast to rise 3.6% YoY and fall -0.2% MoM. Actual 1.7% YoY and -1.8% MoM

2.45 pm – US manufacturing PMI (April, flash): expected to rise to 53.5 from 53.3

3.00 pm – US existing home sales (March): forecast to rise to an annual rate of 5.6 million from 5.48 million
Kind Regards,
Casco Financial Services Limited