Sterling steady as retail data offers mixed messages

Today's Highlights

• Sterling steady as retail data offers mixed messages

• US oil exports threatening the dominance of the Organization of the Petroleum Exporting Countries (OPEC)

• Canadian inflation should show growth

Current Market Overview

The Confederation of British Industry (CBI) Distributive Trades survey was a mixed bag. Retailers are expecting poorer conditions in the coming three months, but current activity bounced back from last month. Sales levels were up. So, whilst negativity pervades forecasts and expectations, the actual activity is in positive territory.  That seems to be the way of things for the UK right now. All the forecasts are dire, but the activity is quite the opposite. However, uncertainty over business rates will be having an impact on business confidence. Some big rises are mooted. Sterling was on a ‘steady as she goes’ path through the day, with minimal volatility as we head towards today’s mortgage data from the British Bankers’ Association (BBA).  
 
Oddly, the US Dollar has not strengthened, in spite of news that many Federal Reserve members are seeing an interest rate hike pretty soon. It must be said that this level of hawkishness was not borne out within the minutes of their last meeting, which were published this week. In unrelated news, it is becoming clear that America is becoming less reliant on imports for oil and energy products. The US exported more than a million barrels of crude per day for the last two weeks, as shale production boosts output; making the US a real challenge for OPEC.
 
We are seeing reports that a Greek debt deal is nearly in place. The three parties, Greece, Germany and the International Monetary Fund (IMF) appear to be on the brink of a deal. I wonder if the IMF still feels that Greece will need to leave the Eurozone at some stage. The euro is largely unmoved by the news.
 
Reserve Bank of Australia Governor, Philip Lowe, scotched any idea of further interest rate cuts overnight, as he said that he sees little chance of further falls in inflation. He went on to pour scorn on the global race to cut corporate taxes. I suspect Australia will be the last in the queue to do so, then. The Aussie Dollar remains rather overvalued in the wake of his comments.
 
Today’s only meaningful data comes from Canada. We are expecting a pickup in the rate of inflation, as higher energy costs and rising commodity prices lift prices. The headline rate ought to be in the 1.5 to 1.7% area and that is well within the Bank of Canada’s comfort zone. So, the Canadian Dollar may strengthen a little if the number is at the upper end of that spectrum.
And Waitrose is in the news (well on Twitter, which is nearly news…) for the wrong reasons. They have launched the £15 LED illuminated Easter Tree as a… thing. Oddly, rather than just ignoring it as yet another useless bit of marketing nonsense, some people have become apoplectic with rage that such a thing even exists. What are your thoughts?