Today's data releases
 Key levels
09:10Eurozone Retail PMI  
12.30US Fed's Dudley speaks SupportResistance
15.00US factory orders and durable goodsGBP/USD1.36571.4068
18.15BoE's Haldane speaksGBP/EUR1.11711.1508
Market overview

Former Italian Prime Minister Matteo Renzi resigned as leader of the Democratic Party yesterday following Sunday’s general election. There has been little new news of note from Italy since then, with the important final seat numbers still being allocated. Following Sunday’s vote we have heard from the leaders of 5* and Lega Nord as Eurosceptic parties won 55% of the vote in total. The key question is which party will get the first crack at trying to form a government, particularly in light of there being no easy political paths. The President, Sergio Matarella, will likely play a key role in guiding the negotiations.  Italian markets look calmer this morning, with futures on the FTSE MIB opening higher and bonds and the euro holding steady.


The US has eased up on US President Donald Trump’s trade war threats with a more conciliatory tone on the renegotiation of the North American Free Trade Agreement. House Speaker, Paul Ryan, has urged the Trump administration to not to move forward with his new tariff plan. He cited risks to the economy and his spokesperson said “We are extremely worried about the consequence of a trade war and are urging the White House not to advance with this plan”. Trump has however said he will take a hard line by linking a successful deal to his plans for aluminium and steel tariffs. He explicitly said that due to the large trade deficits with Mexico and Canada, the NAFTA deal was “a bad deal for the USA”. There has already been an EU response as they have put together a list of more than 100 US products that could be affected in response to any move by Washington to impose trade tariffs on their products. Fears of an impending global trade war have impacted on the German stock market and its benchmark, the Dax index, as carmakers such as BMW, Volkswagen and Daimler ended the day lower.


The data from yesterday was fairly light on the ground with the release of the UK PMI figures the main event. The services figure was better than expected at 54.5 in February, up from 53.5 and above consensus. Accordingly, the composite PMI also rose to 54.5 from 53.0 after the earlier manufacturing PMI was broadly unchanged. This morning saw the release of the British Retail Consortium Retail Sales which were not too dissimilar to January’s. On a like-for-like basis, sales growth stood unchanged at 0.6% year on year (yoy) in February, whereas total retail sales expanded 1.6% yoy following a 1.4% yoy rise in January, the biggest rise in five months. Underlying this is a familiar story: food sales growing strongly and “non-essential” non-food sales suffering amid the squeeze on real household incomes.


We also had the Reserve Bank of Australia announce their latest interest rate decision which left the rate unchanged at 1.5% as expected.


The day ahead

Similarly to yesterday, we have a very light day data wise. We have factory orders and durable goods from the US and we also hear from Fed’s Dudley at 12.30pm. MPC member Haldane, the chief economist of the BoE will also speak early this evening.

Thought of the day

If you have ever woken up after a night out feeling sorry for yourself, only for this misery to be compounded when checking your bank balance, spare a thought for Kenny Bachman of Gloucester County, New Jersey. After deciding to get an Uber to take him back to where he was staying, near West Virginia University's campus, the drunk Uber user quickly passed out. Upon waking - over two hours later – Bachman realised that instead of completing the intended journey the driver was instead taking him to his home - in Gloucester County, New Jersey, more than 300 miles away. To make matters worse, he had ordered an UberXL, which can hold up to six passengers but costs more than the usual ride and a surge pricing then doubled everything but the booking fee. The fare worked out at $1,635.93 (£1,186) - a $3.94 base fare, a $2.35 booking fee, $696.95 for distance and $115.90 for time – totalling a $1,635 bill. If, like Bachman, you have experienced some unexpected costs recently, feel free to call the Dealing Desk today on 0800 055 6339.

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