It is a busy day on the UK economic calendar. This morning, UK retail sales figures for March kick started the UK session. There was increased interest in today’s figures following the hotter-than-expected inflation figures and the persistent wage growth numbers.
UK retail sales fell by 0.9% in March versus a forecasted 0.5% decline. In February, retail sales jumped by 1.1%.
According to the Office for National Statistics,
- Sales volume increased by 0.6% in the first quarter of 2023 compared with the previous three months.
- Non-food store sales fell by 1.3%, partially reversing a 2.4% rise in February.
- Food store sales volume declined by 0.7%, reversing a 0.6% increase in February.
- Non-store retailing also declined (-0.8%) after a modest 0.3% rise in February.
- Auto fuel sales increased by 0.2%. In February, auto fuel sales fell by 1.2%.
GBP to USD Price Action
Ahead of the retail sales figures, the GBP/USD fell to a pre-stat low of $1.24299 before rising to a pre-stat high of $1.24465.
However, in response to the retail sales figures, the GBP/USD fell to a post-stat and session low of $1.24209.
This morning, the GBP/USD was down 0.11% to $1.24283.
Flash private sector PMI numbers for April are due later this morning. We expect the numbers to influence sentiment toward the UK economy and BoE monetary policy.
The headline services PMI figure will have the most influence. However, investors should consider the sub-components of the private sector PMIs. Input and output prices and new orders will likely be focal points.
Economists forecast the all-important services PMI to hold steady at 52.9.
With the UK economic calendar on the busy side, investors should monitor the Bank of England commentary. However, no MPC members are on the calendar to speak today, leaving investors to monitor chatter with the media.
Looking ahead to the US session, it is a busier day on the US economic calendar. Flash private sector PMI numbers for April will be in focus.
After disappointing Philly Fed Manufacturing Index numbers from Thursday, weak PMIs would also sound the recession bells. While the headline figures will draw interest, investors should consider the sub-components, including new orders, employment, and prices.
However, FOMC member commentary will also influence.