What’s been happening?

Pound Sterling – UK Markets 

The British pound extended its slide against the greenback on Thursday and posted modest gains vs the euro for the second straight day. Reports of the government not looking to bring the Brexit deal to a vote next week weighed on the currency in the first half of the day as it reaffirmed the lack of progress in cross-party Brexit talks. Additionally, the leader of House of Commons, Andrea Leadsom, told reporters that they could not give an exact time on when the Brexit deal will be brought back to parliament.

While speaking in London, British foreign secretary Jeremy Hunt said that other foreign ministers he met were worried about the "distraction of Britain not being able to make decisions over Brexit." Hunt further reiterated that the UK had to leave the EU "quickly and cleanly."

The Confederation of British Industry in its latest Distributive Trades Survey on Thursday announced that retail sales on a yearly basis grew for the first time since November 2018 in April. Commenting on the survey findings, “It’s encouraging to see retailers with more of a spring in their step than in recent months. The recent pick up in real wages is a welcome support to the sector, making the pound in people’s pockets stretch that bit further," Rain Newton-Smith, CBI Chief Economist, said.

US Dollar – US Markets

The greenback’s relentless rally continued on Thursday but lost some momentum and staged a technical correction in the second half of the day despite the upbeat data from the United States. Nevertheless, the US Dollar Index was able to continue to push higher and post its best daily close since May of 2017.

In its advanced estimate, the U.S. Census Bureau reported that durable goods orders in March increased by 2.7% following February’s 1.1% decline and surpassed the analysts’ estimate for a growth of 0.8% hinting at a strong first-quarter GDP reading tomorrow. “Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders increased 2.3 percent.  Transportation equipment, also up four of the last five months, led the increase, $6.1 billion or 7.0 percent to $93.8 billion,” the press release read. 

Other data from the U.S. showed that the Kansas Fed’s Manufacturing Activity Index edged lower to 12 in April from 17 in March. 

Euro – European Markets

Although there were no macroeconomic data releases from the euro area, the selling pressure surrounding the shared currency remained intact on Thursday and forced the currency to suffer losses against both the dollar and the pound sterling.

In its Economic Bulletin, the European Central Bank repeated that global headwinds continued to weigh on the eurozone growth and an ample degree of accommodation was still needed. Later in the day, Luis de Guindos, Vice-President of the ECB, said that there was a wide range of potential tools available to the ECB adding that quantitative easing was something that they could use again if needed.

What’s coming up? 

UK:  The Confederation of British Industry will be publishing its April Industrials Trends Survey (orders) on Friday.

US: The U.S. Bureau of Economic Analysis will release its first estimate of the first quarter GDP growth, which is expected to tick down to 2.1% on a yearly basis from 2.2% recorded in the last quarter of the year. The University of Michigan will publish its final Consumer Confidence Survey for April as well.

EU: There won’t be any macroeconomic data releases from the euro area.