GBPJPY, H1
UK retail sales in March disappointed, contracting by a sharp 1.2% m/m. This was payback after the relatively strong 0.8% m/m expansion in the month prior, though was much worse than the -0.5% m/m median forecast had anticipated. The y/y figure worked out at +1.1%, down from +1.5% y/y in February and below the median forecast for 1.9% y/y growth. For the quarter, retail sales were down 0.5% q/q, which is the biggest quarterly contraction since Q1 2017. The ONS points to unusually harsh weather conditions as being a factor, and says that the poor performance of the sector will take toll on GDP. A high profile British department store chain, Debenhams, had forewarned downside risks to the official retail sales release, with is share prices diving by over 10% at the open today (currently -8.5%) after reporting that its underlying pre-tax profits had halved. On a more positive note, data earlier in the week showed the first inflation-adjusted gain in average household income in a year. The UK’s Preliminary Q1 GDP data is due next Friday April 27th.
Sterling came under immediate pressure with Cable dipping to 1.4160 and GBPJPY to 151.97, the Crossing EMA Strategy picked up a net +31 pips on these moves lower.
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