UK Q1 GDP might show a below consensus print

Market movers today

• In the UK we expect GDP growth to have eased a bit to 0.4% q/q in Q1 15 from 0.6% q/q in the previous quarter, as hard data in terms of retail sales, production and construction output have been relatively weak in Q1. Surveys have been more resilient, suggesting that growth will pick up pace again in the coming quarters.

• In the US we expect the Conference Board’s consumer confidence to have improved to 103.9 in April from 101.3 in March. So far consumer confidence has been resilient in 2015, lending some support to the view that the weakness in private consumption in Q1 15 is largely temporary. Case-Shiller house prices for February are also due for release.

• Bundesbank President Jens Weidmann is scheduled to speak this evening at 19:30 CET in Essen, Germany.

Selected market news

It seems like the global markets have entered a bit of a wait-and-see mode as uncertainties over the Greek situation still linger. Hence, the US stock markets overall dropped slightly in yesterday’s trade. In Asia the stock markets are also trading slightly lower this morning with the exception of the Japanese Nikkei index, which is slightly up (see more below).

Yesterday sentiment in the European fixed income markets turned slightly more positive on the back of the news that Prime Minister Alexis Tsipras announced that he had reshuffled his European negotiation team effectively side-lining Finance Minister Yanis Varoufakis.

On the economic front this morning brought disappointing numbers for Japanese retail sales, which dropped 9.7% y/y in March – somewhat below the consensus expectation of 7.3%. The weak data come ahead of this week’s Bank of Japan policy decision. The weak retail sales news is not the only bad news out of Japan. Hence, yesterday Fitch cut Japan’s sovereign rating by one notch to A from A-plus, citing a lack of effort on behalf of the Japanese government to improve public finances after a planned sales tax hike was postponed. The Japanese markets, however, have been little affected by the bad news and the Japanese Nikkei stock index is in fact trading up 0.5% this morning, while the JPY has been stable against the other major currencies.

In the global FX markets the USD has been trading weaker after a preliminary reading on US non-manufacturing PMI slipped to 57.8 in April from a seven-month high of 59.2 in March.