The pound made marginal gains against the US dollar yesterday as the US dollar failed to build on Monday’s position.
Sterling was also supported by upbeat UK manufacturing PMI results, which returned to expansion in March following almost two years of contraction. The reading came in at 50.3, higher than expectations and the former reading of 49.9.
Germany’s consumer price inflation fell to 2.2% in March from 2.5% in February, slightly lower than market expectations of 2.4%. This is the lowest rate since May 2021, which suggests the European Central Bank’s 2.0% target could be in sight sooner rather than later.
The four biggest southern European economies, Italy, Spain, Portugal and Greece, have collectively outgrown Germany by around 5.0% since 2017, according to an analysis conducted by the Capital Economics consultancy for the Financial Times.
New US labour data revealed that the number of job openings rose slightly by 8,000 to 8.756 million in February, exceeding the market consensus. Increases in job openings in finance, insurance, state and local government, arts, entertainment and recreational sectors were offset by declines in the information and federal government sectors.
In the business world, a £400 million bond issued by Kemble, the parent company of Thames Water, fell to record lows as the company scrambles to protect its future. The government commented it is “ready to step in if necessary”.
As markets reopened on Tuesday, Superdry’s share price sunk by 55% to around 13 pence, following founder and chief executive, Julian Dunkerton’s decision to rule out a takeover offer.
This morning, we’ll receive news on the euro area inflation rate, which is forecast to remain unchanged at 2.6%.
Later today, investors turn to the US as ISM is due to release services PMI data, which is forecast to have slipped slightly to 52.4 in March from 52.6 a month prior.
Federal Reserve chair, Jerome Powell, is also due to speak this evening and we’ll be listening out should he provide any hints on the central bank’s next interest rate move.
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