By Simon Eastman
Last week saw Sterling attempt to make gains, driving on from the UK reaching the next stage out of lockdown.
We also saw some better than expected data releases for the UK, with GDP and retail sales both outstripping the expected forecasts. Unfortunately the pound couldn’t build on the gains from early in the week and tailed off although Friday finished up on the day.
It goes to show how despite the data pointing towards a stronger economy, the underlying focus of Covid is still the main driver of the currency markets. With the rise in cases of the Indian variant, there are concerns surrounding the end of lockdown next month actually being on the 21st. If we don’t finish the roadmap plan as hoped, this will be a serious blow to the economy and the pound, so while uncertainty remains, gains are likely to remain limited as we have seen over the last couple of months.
With Covid concerns in the background, the data is unlikely to make much difference but they’re worth noting all the same as the month comes to a close. For the main releases, see below:
Tuesday
German GDP and IFO business sentiment, US new home sales, Bank of England member Tenreyro speech.
Wednesday
NZ trade balance and RBNZ interest rate decision and monetary policy press conference/statement.
Thursday
German Gfk consumer confidence survey, US durable goods orders and GDP plus FED treasury speech from Janet Yellen.
Friday
EU consumer confidence and economic sentiment surveys, US consumer spending and consumer sentiment surveys.
As we head toward the close of May, with a long weekend looming, we expect sentiment to lead market movements. So whilst there is a good array of data points to discuss over the week, it’s likely Covid will be the main talking point.
Whilst Spain apparently opens its doors to Brits today, many will be keen to get on a plane and head out to search for their dream Place in the Sun. With that in mind, give one of the team a call today to discuss your upcoming plans and find out how we can help you make the most of your budget.