Last week we saw the Pound weaken slightly after disappointing retail sales figures- this was also coupled with Deputy Prime Minister Dominic Raab’s resignation. Most of the drop in retail sales seems to have come from food (Which is where a lot of the inflation is coming from currently) so it comes as no surprise that consumers are buying less of what they are being charged more for.
As we enter May (which is a historically weak month for Sterling) it will be interesting to see how the market reacts to the numerous interest rate rises we have over the coming weeks. Before we get to May, there are still a few data releases that could swing the markets a little.
On Wednesday we have Durable goods orders out for the U.S- Which previously have been coming in at negative figures- this month we are expecting a rise to 0.8% which means that manufacturers are back to doing more business- this may encourage some Dollar strength mid-week.
On Thursday we have EU Consumer Confidence and economic sentiment- both expected better than last month and following last week’s Eurozone data, we are expecting most EU figures to come out positive which will support a stronger Euro moving forward- the ECB are also expected to raise rates again next month which could support GBPEUR moving lower and EURUSD moving higher again.
Aside from the above it will be a relatively quiet week- and with the UK on bank holiday on Monday 1st May- the fireworks are not expected to begin until Tuesday the 2nd.