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UK Data  

• Wednesday 7.00am Nationwide House Prices for March previous 10.2% bal
• Wednesday 9.30am GDP for Q4 previous 3.0%y/y
• Thursday 11.00am CBI Distributive Trades Survey for March previous 19.0% bal

Last week saw Sterling rally once again as stronger than expected inflation data fuelled expectations that another rate hike from the MPC is on the horizon. Both the Consumer Price Index (+2.8%y/y) and the Retail Price Index (+4.6%y/y) exceeded expectations, the latter showing its highest reading since August 1991. There were also signs of a robust economy with retail sales (+1.4%m/m) beating the consensus forecast. The only slight negative for Sterling was the release of the Bank of England minutes which surprised the market revealing an 8-1 vote to leave rates unchanged with Blanchflower voting for a cut. This week, the main highlights will be the CBI Distributive Trades following last week’s strong retail sales figures and the final Q4 GDP figures for an indication on the general wellbeing of the economy. On Tuesday MPC Governor King and other MPC members are set to deliver evidence before the Treasury committee.

US Data 

• Monday 3.00pm New Home Sales for February previous 937k
• Tuesday 3.00pm Consumer Confidence for March previous 112.5
• Wednesday 1.30pm Durable Goods Orders for February previous -7.8%m/m
• Thursday 1.30pm GDP for Q4 previous 2.2%q/q ann.
• Thursday 1.30pm GDP Price Deflator for Q4 previous 1.7%q/q ann.
• Friday 2.45pm Chicago PMI for March previous 47.9

As widely expected, the FED kept interest rates on hold at 5.25% when they met last week, however the key was in the accompanying statement where Bernanke switched the bias from hawkish to neutral. There was some respite for the Dollar however with building permits (1.532m) housing starts (1.525m) and existing home sales (6.69m units) indicating further recovery in the US housing market. This week, the market will focus on Thursday’s final Q4 GDP numbers for confirmation of a robust economy and new home sales for further signs of a recovery in the US housing market. The highlight though will be the testimony by Bernanke to the Joint Economic Committee of congress on Wednesday.

Euro Data  

• Tuesday 9.00am German IFO (Business Sentiment) Survey for March previous 107.0
• Thursday 9.00am EU Retail PMI for March previous 49.8

The sole highlight on last week’s calendar was January’s industrial new orders which failed to live up to expectations coming out at -0.2%m/m. This week, attention turns to the German IFO Survey where the market will be looking to see whether or not the recent up turn in economic sentiment is shared by the business community in Europe’s largest economy.

Interest rate outlook