UK retail sales rebound in February

The vote on the healthcare bill in the US congress has been postponed until today, with President Trump issuing an ultimatum to Republicans to either vote for the repeal and replacement of Obamacare or be left with it and move on.

Markets view the vote as a test of whether and to what extent the US administration might  be able to push through other reforms (e.g. taxation), and so are in something of a ‘wait and see’ mode at the moment. Stocks were not much changed yesterday, US bond yields closed a touch higher, and the dollar was a little firmer

Retail sales in the UK rebounded strongly in February, which following Tuesday’s stronger than expected inflation numbers, prompted some further gains for sterling (it firmed to around 86p against the euro). Notwithstanding last month’s outturn, the underlying trend in retail sales is quite weak and they look on course to post an outright decline in the first quarter of this year

Bank of England MPC member Vlieghe says he would need to see evidence of strong wage growth before he would consider voting for an increase in interest rates. At the moment, he says, wages are ‘subdued’

ECB member Praet says ‘the economic situation (in the Euro area) is  improving…but the upward  trend and hence the normalization of inflation are still very dependent on monetary policy stimulus’

Data due today includes ‘flash’ PMIs in the Euro area