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UK Gross Domestic Product (GDP) and interest rates in the days ahead

Published: Tuesday 08 May 2018

  • Dollar strong ahead of Trump’s Iran message
  • Aussie consumer confidence up but retail sales flat
​​By David Johnson
Sterling hasn’t moved a lot over the long weekend in the UK. Other markets were still trading and the Pound was washed along in the wake of the USD and Euro. Even the cabinet row over the shape of the post-Brexit tax and trading affairs failed to move the Pound. So, we in the UK, start this abridged week with the Pound balanced at €1.1350 and $1.3530. This week brings an estimate of Gross Domestic Product (GDP) growth and the Bank of England’s (BoE) deliberations on interest rates and Quantitative Easing budgets. No change is expected in either case, but the voting pattern will tell its own story. Mixed UK data of late should allay the fears over inflation.
Overnight news included crude oil hitting its highest price since 2014 before slipping back a tad. You’ll see that in pump prices already. Higher oil prices also tend to weaken the USD but we have seen little evidence of that yet. The US president’s announcement on the Iran deal will impact the price of oil and the USD. That is due today we think, but it may come in the form of a tweet…or not. The USD is currently trading near a 4 month high overall. There are some speeches from Federal Reserve bods today as well, so hints and tips on rate hikes will be sought.
We also heard that Australian consumer confidence improved a little in April but Aussie retail sales were flat in March. The Australian Dollar is sitting on A$1.80 against the Pound and looks pretty stable at that for now.
And you have to love Mark Williams’ integrity. He vowed (or threatened) to strip off if he won the Snooker World Championship and he got it out of the way pretty quickly by appearing at the press conference in just a towel - which he removed once he had seated himself behind the desk. To say he looked awkward is a huge understatement. Keeping your promises is very important though.
Corny jokes
Why was the sand wet?
Because of the sea weed.
How did the barber win the race?
He knew a short cut.

When is a car not a car?
When it turns into a street.

Today's Major Economic Releases

Market BST Data/Event Previous Expected
AUD 10:30 Australia: Annual Budget Release    
CAD 13:15 Canada: Housing Starts 225k 218k
USD 15:00 US: JOLTS Job Openings 6.05m 6.02m

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