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Flash: UK heads up European focus again today - BTMU

FXstreet.com (Barcelona) - Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that the focus from Europe today will be on the UK with the release of the retail sales report and the minutes from the MPC meeting held on 8th-9th May.

He comments that there has been some better economic data (Q1 GDP at +0.3%) that could result in one or more of the three that have been voting for more QE altering their stance. However, with Governor King on his way out and with yesterday’s inflation data much lower than expected, he expects that any shift today does not necessarily spell the end of monetary easing prospects ahead. He adds, “Still, with global equity markets so strong and investor optimism so high, the probability of additional easing is clearly lower than before.” After the bad weather-induced 0.7% drop in retail sales in March, Halpenny believes that the likelihood is that we will get some degree of rebound in today’s April report. However, real incomes remain depressed and hence any rebound is likely to be muted.

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BoE Minutes next: impact on GBP/USD, EUR/GBP, GBP/JPY

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