Major currencies did little in the overnight session with markets geared up for a potentially important day for macro releases and policy news.
First up will be UK industrial output data for March which could at the margin help ascertain whether GDP growth managed to rise in Q1 2018 from a modest 0.4% quarter-on-quarter in Q4 2017. A soft number could be blamed on poor weather (the wettest March in a decade) and may not halt Sterling’s metronomic rise in recent weeks.
European Central Bank (ECB) President Draghi speaks today and markets will try to glean any hints that the ECB would be comfortable with even slightly tighter monetary policy or at least is comfortable with the current level of the Euro. But don’t expect fireworks from the usually very measured Mr Draghi.
In the US markets will focus on March consumer price inflation and the minutes of the 21st March Federal Reserve Policy meeting through the prism of whether the Fed could hike interest rates four times this year. Producer price inflation rose to a higher-than-expected 3.0% year-on-year in March with core PPI-inflation rising to 2.9% yoy – the high since August 2014. The question is whether this has translated to CPI-inflation which has been stuck in a 1.7-2.5% year-on-year range in the past 16 months.
