It has been a relatively lack luster week with still so much uncertainty surrounding markets. President Trump disappointed on Wednesday with his vague tax plan which markets had been eagerly anticipating since January. The publication left analysts with more questions than answers with the one page containing less than 200 words and just 7 numbers. There is no let up for Trump either with the prospect of a government shutdown just two days away with Congress having till Saturday night to pass a bill to fund the government. A shut down here would temporarily see hundreds and thousands of federal workers laid off, which could potentially impact Q2 figures.
ECB President Mario Draghi briefly startled markets with his fresh new bullish rhetoric about the Eurozone’s economic outlook. However he who gives can take away and that is exactly what Draghi did, stating in the same breath that it was still too soon for the ECB to even discuss ending its asset purchases. Draghi’s message was clear, he didn’t want a repeat of the central banks mistake 6 years ago when it prematurely hiked rates just before the Eurozone crisis. Markets saw the press conference as being overall more dovish, and pushed out rate hike expectations. While the Euro spiked above the 1.09 level briefly against the dollar, only to settle back into the 1.08s. Against the pound it maintained its mid-1.18 level.
While it may be the last day of the week, we still have plenty more room for more surprises. First up, where we just saw UK preliminary GDP data for Q1 which posted its worst performance in a year. The disappointing figure showed UK growth falling to 0.3 percent in the first three months of the year, less than the 0.4 percent expected and down from 0.7 per cent. With Consumer spending accounting for a large portion of the overall figure here, it is perhaps no major surprise that the GDP figure is down given the poor retail and lending figures for the consumer in Q1. Later on in the morning we have flash inflation figures from the Eurozone. We then finish up with US GDP readings where markets are also expecting a slowing on the quarterly growth.