Market Awaits Bernanke?s Words As Concerns Mount Over UK Economy

Published: Monday, 26 March 2012 09:00 BST - Written by James Fuller

STORY LINK Market Awaits Bernanke?s Words As Concerns Mount Over UK Economy

Friday’s session in the currency markets saw renewed concerns raised about the state of the UK’s real economy, following the release of the Nationwide Consumer Confidence survey for February, which showed a considerable drop-off in sentiment amongst respondents since the month before. Analysts had expected the number to show no change from January’s print of 47, so the reading of 44 came as an unpleasant surprise.

Nationwide reported that the dip in confidence was driven by concerns from British workers about the security of their jobs, given the relatively weak state of the UK economy. The disappointing survey results followed Thursday’s weaker than anticipated British Retail Sales numbers, suggesting that all is not well with the UK PLC.

However, Britain was not the only major global economy to register disappointing data on Friday. US New Home Sales data for last month showed at 313,000, lower than January’s print of 318,000 and considerably below the 325,000 which analysts expected.

Nevertheless, it was not bad news all the way, as the week drew to a close. Italian Retail Sales numbers which also came out on Friday showed that there had been a monthly increase in the level of shop sales in the debt-burdened Mediterranean economy last month, when a contraction had been expected. This suggests that Italy is managing to weather the stringent austerity measures which it has experienced since technocrat Prime Minister Mario Monti took over the top job.

Today sees a relatively light day for risk events. Potentially the most market-moving set-piece comes this lunchtime, when US Federal Reserve Chairman Ben Bernanke addresses a conference of Economists. If Bernake’s tone regarding the global economic situation is negative, then the US Dollar may come in for significant safe-haven support in the latter part of today’s session.

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