Main exchange rates steady

The main exchange rates are relatively calm with the dollar perhaps a touch firmer against both the euro and sterling trading in and around $1.10 and at $1.23 respectively, leaving the euro-sterling exchange rate largely unchanged at 89p. Meanwhile equity markets advanced at the start of the week, and European stocks are set to open in positive territory today after surprisingly good economic data out of China overnight, though core bond yields are a little lower this morning

In China, the manufacturing and services PMIs rebounded strongly in March rising to 52.0 and 52.3 respectively, both above the 50 expansion-contraction threshold and consistent with expanding economic activity

Consumer confidence in the UK slipped in March, albeit marginally so, according to the latest GfK index. However, as GfK notes, “importantly, this research was carried out during the first two-weeks of March, when the coronavirus was headline news but not impacting day-to-day lives of people across all UK nations to the degree we see today”, suggesting the April reading may show a larger decline in sentiment. Meanwhile, the Lloyds Business Barometer, a gauge of business sentiment, fell in March to its lowest level since October last year

The OECD notes in its latest analysis of the impact of COVID-19 that economies have taken an immediate hit and that, for each month  that strict containment measures are in place, “annual GDP growth will be up to 2 percentage points lower that it might otherwise have been”

Data due today include consumer confidence and house prices in the US