UK Economic Growth in Focus
UK economic growth is in focus today with the release of Q4 GDP figures which came in at a better-than-expect 1.3 percent on a quarterly basis. Inflation is running at 30-year highs, driven by the impact of geopolitical and COVID-19 risks on crude oil prices.
The US economy reflects a similar story of inflation, jobs and GDP growth in a race against time. London and Wall Street financials are waiting to see which economic trend will dominate monetary policy, with expectations that the BoE and Federal Reserve are likely to raise their interest rate guidance in the near term.
ADP job numbers for March satisfied expectations that the US labour market sustained strength through the first quarter as the economy recovered from COVID-19 lockdowns. If the jobs sector stays robust in the second quarter it will likely support the USD’s safe-haven value.
In more developments, the NFP numbers are set for release on Friday with a possible ripple effect on the USD and spot gold prices.
US set to move on crude oil reserves
Crude oil spot prices took a hit after news that the US may release 180 million barrels of reserves in a bid to calm supply-side fears and high fuel prices stemming from geopolitical risks. The conflict in Ukraine fired up animal spirits and crude oil spot prices went through a month of volatility.
In related news, oil market heavyweight OPEC meets today amid expectations the group will not change its plans to add no more than 432,000 bpd to current production levels during May.
Other financial events to watch today include Germany’s retail sales releases which may have an impact on the EUR crosses after coming in at a better-than-expected seven percent. And manufacturing data due for release from Japan is a red-flagged event for Yen traders.
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