Silver linings for UK investors (video)
Currencies Direct April 24th 2015 - 2 minute read
Many investors will be ready for the weekend after dispiriting UK retail sales figures this week: the latest report produced a (lower than expected) figure of 0.5%, said to be the result of a dip in petrol sales. However, they may yet have reason to be cheerful.
Removing petrol sales from the official figures actually increases the percentage by 0.2% in March. Consumers are cautiously starting to spend, and recent wage growth and low inflation is expected to see them spending more in the lead up to summer.
Government borrowing dropped to £7.4 billion in March, moving the total sum for the financial year to £87.3 billion (initial forecasts were around £90.2 billion). This is a positive showing, because UK borrowing was at an extreme high in 2009 – around £153 billion – which was just before the coalition government took control of the UK’s finances.
Europe braces for trouble ahead
Poor manufacturing orders in Germany and France have hit the Eurozone’s Purchasing Managers Index (PMI) figures. These are showing slower growth and raising questions as to whether recent confidence has been premature. The PMI fell to 53.5 (previous viewing was 54.0), and this will be seen as disappointing in light of the European Central Bank’s recent purchase of government bonds to stimulate the flagging European economy.
With factory orders growth slacking in two of the larger EU economies, there are suggestions that there’s more poor data ahead.
US hopes to keep its sunny side up
Initial Jobless Claims in the US were at 295,000 as of yesterday (23 April), up slightly from analysts’ expectations of around 280,000. US Markit manufacturing PMI was also weaker than expected, with figures of 54.2 vs 55.7. This was the first time in four months that orders have declined, and the US dollar’s strength across the board was seen as a possible reason for the drop.
Today (24 April) we have USD Durable Goods Orders, which will cap this week’s data. The US will be hoping for some positivity after an unbalanced week of trading.