News of an Israeli drone attack on Iran overnight saw oil prices pop higher, US yields fall and safe-haven currencies gain ground, though these moves have since been partially reversed after Iran said it had no immediate plans to respond. In FX markets, the yen and Swiss franc have given up most of their initial gains, while the euro and sterling are back up to around $1.0650 and $1.2440 respectively having briefly dipped to around $1.06 and $1.2390 (leaving EURGBP trading just north of £0.8550).
Yesterday’s Events
US government 10-year yields are around 5bps lower at 4.58%, having fallen to around 4.50% initially on news of the Israeli attack, while equivalent German and UK yields are marginally lower at the open this morning. In equity markets, Asian stocks took a hit overnight while European indices have opened lower today (the Euro Stoxx 50 is off around 0.8%).
Brent crude oil Prices jumped by around $4 to $91 per barrel but have since come back to about $88, only slightly above yesterday’s close, though obviously they will remain sensitive to any further developments in the Middle East.
In the UK, retail sales in March were weaker than expected according to data published earlier this morning, with volumes flat on the month having risen by 0.1% in February. Volumes in the first quarter were still up 1.9% on the final quarter of last year though, partly reflecting strength in spending in January, which will make a positive contribution to GDP growth in Q1.
Fed member Kashkari says the central bank must be “patient as long as it takes until we are convinced that inflation is on its way back down to 2%,” adding the interest rates could remain on hold through all of this year.
The Day Ahead
It is very quiet on the economic data front today with nothing of note due, while there are a few central bank members scheduled to speak.
Market Commentary
News of an Israeli drone attack on Iran overnight saw oil prices pop higher, US yields fall and safe-haven currencies gain ground, though these moves have since been partially reversed after Iran said it had no immediate plans to respond. In FX markets, the yen and Swiss franc have given up most of their initial gains, while the euro and sterling are back up to around $1.0650 and $1.2440 respectively having briefly dipped to around $1.06 and $1.2390 (leaving EURGBP trading just north of £0.8550).
Yesterday’s Events
US government 10-year yields are around 5bps lower at 4.58%, having fallen to around 4.50% initially on news of the Israeli attack, while equivalent German and UK yields are marginally lower at the open this morning. In equity markets, Asian stocks took a hit overnight while European indices have opened lower today (the Euro Stoxx 50 is off around 0.8%).
Brent crude oil Prices jumped by around $4 to $91 per barrel but have since come back to about $88, only slightly above yesterday’s close, though obviously they will remain sensitive to any further developments in the Middle East.
In the UK, retail sales in March were weaker than expected according to data published earlier this morning, with volumes flat on the month having risen by 0.1% in February. Volumes in the first quarter were still up 1.9% on the final quarter of last year though, partly reflecting strength in spending in January, which will make a positive contribution to GDP growth in Q1.
Fed member Kashkari says the central bank must be “patient as long as it takes until we are convinced that inflation is on its way back down to 2%,” adding the interest rates could remain on hold through all of this year.
The Day Ahead
It is very quiet on the economic data front today with nothing of note due, while there are a few central bank members scheduled to speak.
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