Market Report

Just like West Ham sterling is on a roll at the moment, out performing nearly all other currencies with inflation in the U.K still refusing to be tamed. The Pound traded near a two-week high against the dollar yesterday as a manufacturing survey underpinned expectations the central bank will raise borrowing costs twice more this year. The pound may extend gains before a government report today that's expected to confirm the economy maintained the pace of its growth in the first quarter.

Today sees the release of the U.K Gdp at 9.30 and the U.S existing home sales at 15.00 neither are expected to hold any surprises.

Have a great weekend and let's hope the sun keeps shinning.

VC

Commiserations on Liverpool's result last night, not a bad performance but I think the ref was wearing red and black stripes! On the other hand, congratulations to the UK pound on the last 24hrs performance! After the BoE minutes report out yesterday morning, the confidence in our currency has risen quite rapidly. A 9-0 vote for a 0.25% and not 0.5%, still showed that inflation has not been totally curbed but the previous raises are taking effect. It was the talk of a possible 0.5% within the meeting that got the markets excited!

Outside of our island, the USA still has a weak link in their economy with housing figures. With housing, durable goods and initial job claims out this afternoon there is a possibility of another advance towards the sacred 2 mark depending on the outcome.

Now with another three months of no football, it's time to soak up the possible scorching summer ahead of us.

LR

With the mentioning of a possible 50 basis point rise in the BOE minutes and a solid 9-0 vote in favour of a 25 point rise, things certainly could change here for the pound against all of the majors. Other than the main focus on the Liverpool Milan match tonight, my guess is that all eyes will now divert to future inflationary data on the UK throughout this month with a possibility of a rate rise for June.

With little change to the US in terms of the approach to inflation, I would expect the dollar to remain relatively strong against the majors for the rest of the week, unlike the supposed strongest teams in the country, Manchester United & Chelsea whose lack lustre performance over the weekend indicated nothing but how weak a game they are capable of playing.

Either way and as always, all that the uncertainty surrounding where currencies will go, simply tells us as business and private consumers, that we need secure our foreign exchange rates and exposure, thus providing financial certainty in times of uncertainty.

DD

Sterling was steady versus major currencies on Tuesday, up from a six-week low versus the dollar hit in the previous session . However, analysts said more weakness was likely if Wednesday's Bank of England minutes do not meet hawkish expectations. The BoE raised rates to a six year high of 5.50 percent earlier this month, taking them to the highest level among Group of Seven major economies.

Markets are now fully pricing in another rate hike by September, and are giving around a 25 percent chance of rates reaching 6 percent by year-end. Analysts say minutes from the BoE's May meeting are unlikely to be hawkish enough to boost the chances of more tightening further, thus limiting the scope for any sterling gains.

Recent data pointing to slowing house price inflation has also made investors cautious about pushing sterling higher, keeping it well below the 26-year peaks above $2 hit in April.

For Wednesday's minutes, the consensus is that eight Monetary Policy Committee members backed this month's rate hike, while one wanted unchanged rates.

Investors will also focus on whether the MPC discussed the possibility of a 50 basis point move. With no major British data due on Tuesday, sterling could take direction from the German ZEW investor sentiment index.

Once again the Hutchinson household contributed Marks & Spencer profits. The 28.5 percent rise in its last financial year (its highest level in nearly a decade) is due to higher sales in fashion and food. Well done Mrs H and the Mother in Law - top shopping

DH

This week we have some fairly important data being released, which will hopefully make the markets a little livelier than last week. In fact, for anyone that watched the FA cup final, last weeks markets were exactly the same - boring!

ECB president Trichet is speaking on Monday and Tuesday, which is always worth reading the highlights. The Bank of England's May meetings minutes are released on Wednesday, with the expectation being a 9 - 0 vote for the rate hike.

In the US, FED Chairman Bernanke is participating in the US China economic meeting.

In the FA Cup final this weekend, the first major event at Wembley, Chelsea beat Manchester United in Extra time. If these are the best two teams in the country, and this is the best performances they can give then lets hope some other teams challenge these two next season.

Have a good week.

DE

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