UK data this week was generally positive, with annualised growth at a better than expected 1.1% and house prices up by the most since 2017, adding further evidence to a pick-up in economic activity since the election.
The Bank of England has been justified in holding rates and we do not expect any change in policy this year.
The US and European central banks are also expected to keep monetary policy on hold for the remainder of the year.
The equity markets have started the year on a positive note, and remains buoyant despite the negative effects of the Coronavirus.
Ongoing concerns on how the UK-EU trade negotiations will develop, do however continue to weigh on sentiment.
In the US, the focus is increasingly building on the November elections, with the Democrats in the process of selecting their candidate.
On the exchanges, sterling rallied strongly yesterday, whilst the Euro remains under pressure on further weak economic data.
GBP/USD continues to find demand around 1.2900, and we continue our strategy of buying on dips, with an initial target of 1.3250.
GBP/EUR continues to see strong buying interest on dips to 1.1700, with the market breaking through the pivotal 1.2000 level yesterday.
|18/2/20||UK Average Weekly Earns. 3M/YoY||3.2%||3.0%|
|18/2/20||UK Unemployment Rate||3.8%||3.8%|
|19/2/20||UK CPI YoY||1.3%||1.5%|
|19/2/20||UK RPI YoY||2.2%||2.5%|
|20/2/20||UK Retail Sales YoY||0.9%||0.6%|
|21/2/20||UK Markit/CIPS Services PMI||53.9||53.0|
|21/2/20||UK Markit Manufacturing PMI SA||50.0||49.8|
|21/2/20||UK Markit/CIPS Composite PMI||53.3||53.0|
|21/2/20||EU CPI YoY||1.4%||1.4%|
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2733||-1.12%|
UK Benchmark Rates
|3 month||0.75238%||2 year||0.72%|
|6 month||0.80575%||3 year||0.73%|
|12 month||0.88875%||5 year||0.74%|
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