Dollar a little softer again
The dollar is a little softer again against the euro and sterling, trading at almost $1.12 and about $1.2950 respectively, weighed by slightly weaker than consensus inflation data in the US, while the single currency continues to hover around the 86.5p level against the pound. Meanwhile, bond yields in the core markets are edging lower this morning, with US 10-year yields back at 2.50%, after PMI data out of China fell short of expectations
The China composite PMI dipped in April – the consensus expected it to increase from March – with both the manufacturing and services indices edging back last month. However it remained above its February lows and ahead of its average level in the first quarter of the year, suggesting growth may be stabilising after moderating recently
The French economy expanded by 0.3% q-o-q in the first quarter of this year according to GDP data released this morning, the same pace of growth as in the final two quarters of last year (and despite the yellow vest protests)
The annual rate of core, or underlying, PCE inflation in the US slipped for a third consecutive month in March to stand at 1.6% (this compares to 2% in December), despite continuing solid economic growth and a tight labour market. The latest data will add to worries at the Fed, which is concerned that inflation has failed to return sustainably to its target of 2% during the current upswing
Concerns about the health of the consumer in the US will have been allayed by the latest consumer spending data, which showed a strong increase in March (up 0.7% from February) having softened around the turn of the year
Data due today includes GDP (Q1) and unemployment in the Euro area as well as consumer confidence and house prices in the US