The Pound fell around 0.5% last week due to flat Retail Sales data and the BoE deciding to keep rates on hold- the reason why Sterling fell was the retail sales numbers came out at 0% which showed no growth at all, and after last month’s jump in spending this was a disappointing number- The Bank of England started to turn dovish on Thursday with 2 members voting for rate cuts meaning that over the next few months, we will see this narrative development in the UK, it may not be a case of waiting for the Fed, as the SNP have already cut last week and the BoJ have raised rates, we are seeing Central banks beginning to act to steady their economies.
Moving into this very short week, the last week of the quarter and financial year- we will potentially see volatile markets as traders hedge off their positions, this may be seen through Wednesday and Thursday- on top of this, we have a few data releases that could be relevant to finish off March.
Monday will be a quiet day on the data front, but we do have some Central Bank speeches that could be relevant, one from Christine Lagarde (ECB) and one from Bostic (Fed) and Cook (Fed)- with both Central Banks now trying to time interest rate cuts, all speeches may be market moving forward as they could give some guidance on when these Central Banks are expecting to cut rates.
On Tuesday we have U.S Durable goos orders which are expected higher at 1%, this could be positive for the U.S Dollar as this means that companies are beginning to spend again (compared to last months negative figure)- we also have U.S consumer confidence which is expected to remain stable at 106.70 which is still positive for the U.S.
On Wednesday we have consumer confidence data out for the EU, which is still expected negative but slightly better than last months, essentially this should still weaken the Euro, we also have the South Africa interest rate decision where rates are expected to stay on hold.
On Thursday we have UK GDP data which is expected to come out at -0.2% for Q4, which is a quarter of contraction for the UK economy, the hope is that this will be turned around next quarter but this release could still weaken the Pound as it is an official confirmation of the recession.
On Friday, though we will be on Bank Holiday here in the UK, there is PCE price index data out of the U.S, expected to come out stable, and Fed Chair Powell will be speaking in the afternoon- we will then return to the office on April 2nd (Tuesday).