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  • EU GDP Rebounds 0.3% in Q1; Spain & Portugal Lead Growth at 0.7%

Wild swings in USD as money markets raise chances of a US interest rate hike and then quickly slashes them after Fed meeting..

Tuesday was a good day for EU/€ as GDP grew 0.3% in Q1 this year, both recovering from Q4's -0.1% and beating the 0.1% forecast. Both Spain and Portugal are leading the growth charge in the Euro-Zone expanding by 0.7%, making the Iberian peninsula the EU's powerhouse currently. 

Core inflation in the EU dropped from 2.9% to 2.7% with the headline rate remaining steady at 2.4%. This is unlikely to change matters at the ECB who look to be the first major to cut interest rates in June. The Euro initially gained value on both releases across the board.

Over in the US, manufacturing fell into contractionary territory last month causing some unsavoury macroeconomic debate on what to do with interest rates and the Dollar. Rising prices and falling orders is not a good mix and a result of 49.1 from 51.4 the previous month was most unwelcome. 

Yesterday, there was some speculation that the Fed may look to hike interest rates one more time. This was all-but squashed by Fed Chair Powell who said "I think it's unlikely that the next policy rate move will be a hike". It would be a shock to markets if the next move was indeed up, which is why the $ gained on the speculation and then quickly fell back last night. 

It has been a busy week and thus far the British Pound has sailed through quite comfortably. Keeping above the psychological barriers of £-$1.25 & £-€1.17 mid-market are key for Sterling near-term. 

On this day -
In 1945, more than 1,000,000 German soldiers surrender to Allied forces in Italy & Austria

In 2008, Cyclone Naris kills over 130,000 people in Myanmar

In 2011, Osama Bin Laden is killed by US special forces 

In 2016, Leicester City win the English Premier League title at 5,000-1 odds