Spreadex Market Update
UK inflation sees first month-on-month drop since September, US CPI reading still to come
Coming in at 0.3% against the 0.5% expected (some analysts had thought it could creep even higher), the UK CPI was hampered in April by a drop in air fares, which plunged 14.2 across the month, with clothing and footwear prices also falling by just shy of half a percent. The figure doesn’t really provide the Bank of England with anything new to work with, especially considering Carney and co. are stuck in wait and see mode ahead of the EU referendum at the end of June.
This news did, however, help take the edge off cable, which had been approaching a fortnight-high, but did little to interrupt the FTSE’s rise. The UK index maintained a 50 point push as the morning went on, trickling over the 6200 mark for the first time in nearly 2 weeks despite Brent Crude dipping just below $49 per barrel.
The Eurozone couldn’t quite keep up its early hour surge, the DAX seeing its gains halve to 0.7% as Tuesday continued. This was in part due to a miss in the region-wide trade balance figure, arriving almost €1 billion shy of analyst expectations at €22.3 billion, though March’s surplus was still an improvement on February’s upwards revised €20.6 billion.
Looking to the US and the Dow futures are fairly meek at the moment, the index looking at a 20 point rise after the bell. However there is plenty of data to change the tone of trading this Tuesday, most notably the inflation and industrial production figures. The former is forecast to nudge up to 0.3% from 0.1%, a potentially dollar-boosting 8 month high, whilst the latter is expected to bounce out of negative territory to 0.3% from -0.6%. Joining those headline figures are the latest building permits, housing starts and capacity rate utilization numbers.
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