Daily Market Comment

13.05.2008

The euro recovered some ground versus the dollar over the day yesterday, recovering the $1.55 level as markets await the release of US retail sales data for April to see how well consumer spending is holding up. With no data releases for direction, market positioning was seen as the biggest catalyst for the euro’s rise, with last week's recovery in the dollar, even as oil prices pushed higher, leaving the euro as a cheap buy. Headline sales in the US are expected to show a drop of 0.1% on the month due to very weak auto sales, which suggests that the report could be dollar negative. Core sales (ex autos) however, are expected to rise 0.2%, slightly above the growth rate of 0.1% seen in March. A host of Fed members are also scheduled to speak over the day and markets will be looking to see if their remarks support the view that the FOMC has reached the end of its easing cycle. Indications that policy is on hold are likely to provide further support for the dollar. Other US data due for release today include business inventories for March.

Weekly Market Brief

09.05.2008 WEEKLY MARKET BRIEF - 9TH MAY 2008

Key Data for Week 12th - 16th May 2008

Monthly Housing Market Bulletin

08.05.2008 Housing Market Bulletin - May 2008

The continuing price adjustment is helping improve repayment affordability. However, the change in LTVs is hitting entry costs.

Central Bank Watch

08.05.2008 ECB Watch: Storm Clouds Gathering for Eurozone Economy

The European Central Bank again left interest rates unchanged at its policy meeting today. At the press conference Mr Trichet stressed once again that the ECB is strongly committed to preventing second-round effects materialising from the current elevated inflation readings. Given the current high level of inflation, it is understandable that the ECB is not in any mood at present to contemplate policy easing. However, the continuing downtrend in leading activity indicators suggests that growth will move further below trend as the year progresses.