Quiet data week ahead
Sterling starts the week around 0.5% down, which brings us back to the levels seen at the beginning of last week. Again there isn't too much to go on in terms of the cause, but £-€ did touch 1.18 mid-market yesterday whilst North American & European markets were closed, so it may just be a 'grounding' kind of day.
We reported last week that April looks tricky for the £, as the EU has majorly upped it's vaccine rollout. However, two Swiss investment banks have decided to raise their expectations on the Pound both near and long-term and join the majority in having a bullish stance on Sterling. £-€1.19 is the new target from UBS & Credit Suisse, with the latter suggesting it could happen this month.
Historically, April tends to be a good month for the Pound as the fiscal year ends and begins anew. Dividend payments is what causes the strength, especially from UK companies who have overseas operations who would have to repatriate funds in order to do this. But the two banks are primarily fixed on the current gap in vaccinations between the EU & UK. Over 45% of the total population in the UK has now received at least one dose, whereas the EU sits at just 12%. It also means the UK are way ahead in achieving herd immunity (believed to be 60-70%) and so the banks believe that gap is simply to big now and £ will prosper because of it.
Last week was full of action on the data-front, but this week it's mainly full of the 'not so important things'. PMI's tomorrow are the final figures and so shouldn't change much from the prelim figures. The US jobs data is always key and so Thursday becomes the main day of interest.