Rightmove Indicates UK House Price Rise
March’s Rightmove report showed today that house prices in the UK registered the third consecutive monthly rise, amid signs of a supply shortage in Britain’s property sector. Going forward, the minutes of the BoE’s latest policy meeting, along with the official labour market report in the UK scheduled later this week, are likely to keep Sterling traders interested.
Across the Atlantic, market participants will keep a tab on today’s industrial production data which is expected to show that output among US producers improved for February, despite a stronger greenback weighing on the nation’s exports. In the absence of any notable macro triggers in the Euro zone, focus is likely to remain on Greece’s stand-off with its international lenders.
Pound Sterling – UK Markets
The Rightmove report released earlier today showed that house prices in the UK rose for March. Amid recent reports indicating that there is a shortage of properties in Britain’s real estate segment, prospects of a downside in the nation’s house prices remain limited in the near term. The Pound is trading on a firmer footing against the greenback this morning. Later today, US industrial production data will keep investors in the Pound-US Dollar pair interested. Moving ahead, market participants will keep a tab on Britain’s official labour market report scheduled later this week for further direction.
Last week, the BoE Chief hinted about possibilities of a prolonged period of low inflation in the UK and indicated that a sustained weakness in price growth might delay the timing of an interest rate rise in the nation. The Pound dropped below the 1.48 mark against the greenback on Friday following Mark Carney’s dovish remarks. Separately, a report released on Friday revealed that the UK’s construction output declined unexpectedly for January as the number of new houses built dropped sharply during the month.
US Dollar – US Markets
The US Dollar consolidated close to its multi-year highs across the board versus major currencies in Friday’s trading session. The greenback continued the uptrend against its key peers, despite the release of disappointing economic data in the latter half of last week. US producer prices unexpectedly declined for February which possibly signalled that a strong US Dollar is suppressing inflation. Separately, the preliminary print of Reuters/Michigan consumer sentiment index showed an unexpected fall for March, as harsh weather impacted lower and middle income households with higher utility bills.
The greenback is holding firm against the majors this morning, ahead of the US Federal Reserve’s two-day meeting beginning on Tuesday. Expectations of the Fed raising interest rates in 2015 has grown following successive months of strong employment data. Against this backdrop, it remains to be seen if the central bank retains its pledge to remain “patient” about embracing tighter policy measures. For today, investors will eye industrial production data for February and NAHB’s housing market index for March, in the US.
Euro – European Markets
The Euro plummeted against its major peers during the previous week after the ECB commenced its bond-buying programme on Monday. The recent losses of the single currency against the US Dollar have been sharp, with the pair now steadily moving closer to parity. On the macro front, Germany’s wholesale price index rebounded for February, following a sharp drop for the previous month. Additionally, data revealed that Italy’s revised consumer price reading was higher than its preliminary estimate for February. The results of the German ZEW survey scheduled for release tomorrow will be watched in order to ascertain the morale among investors in the aftermath of the commencement of the ECB’s bond buying programme.
The Euro has edged slightly higher against the major currencies this morning, reversing its earlier session losses. There are no major reports due from the Euro zone today. Traders will keep a tab on today’s release of the German Bundesbank’s monthly report for cues on current and future economic conditions in Germany. Moreover, a speech by the ECB president, Mario Draghi will be closely watched.
Other Currencies – Highlights
The Canadian dollar lost ground against the greenback on Friday, as a combination of US Dollar strength and falling oil prices weighed heavily on the currency. Disappointing macro data from Canada further resulted in erasing its earlier session gains against the US Dollar on Friday. The unemployment rate in Canada rose more than expected for February amid job losses and as the number of people looking for work increased. The print also showed that job losses were concentrated in the mining and oil and gas exploration sectors as a slide in oil prices has impacted the resource linked Canadian economy.
The Bank of Canada had earlier cut its benchmark interest rate in January, citing concerns about the negative effects of lower crude prices on the nation’s employment, economic growth and inflation. Previously this month, the central bank kept its rate unchanged and justified its decision stating that oil prices have stabilised from January levels. Going forward, Canada’s foreign securities portfolio investment data for January is up for release today.