An unexpected rise in UK retail sales for March has caused a pop higher in the pound with the currency bouncing from the $1.30 handle in response.
A 1.1% rise in month-on-month terms represents a big beat on the -0.3% expected, and the prior reading was revised higher by 20 basis points to 0.6% for good measure. The year-on-year reading was a bumper +6.7% after 4.0% last time out, but this is to last March falling out of the data set, which was a very bad month for consumer spending due to adverse weather effects caused by the Beast from the East.
The data is the third release in three days from the UK, which on the whole is pretty mixed for the pound with today’s positives mitigating the soft inflation data.
More soft data from the eurozone
Despite a couple of bright spots, the overall picture from the latest batch of industry surveys across the eurozone isn't pretty, and this has caused both the single currency and stock markets on the continent to come under pressure.
The service PMIs from France and Germany both topped estimates, but the eurozone wide figure was worse than expected and another disappointing manufacturing read from Germany will only serve to further heighten concerns of a global slowdown. Due to a downward revision to the prior month which was already at a 6-year low, the data for April actually represents a small recovery, but a reading of 44.5 is still very weak and now means that 10 of the past 12 releases for this metric have come in worse than expected - an ominous sign when German manufacturing is seen by many as a proxy for global growth.