The British pound has been enjoying a run of gains this week and the trend continued on Thursday, as GBP/USD rose 0.23% after a report earlier in the day revealed a better-than-expected increase in UK retail sales last month.
By Peter Martin
Thursday, March 27, 2014
UK retail sales grew 1.7% from January to February, according to the London-based Office for National Statistics. A poll by Reuters had pointed to a 0.5% rise. The US stock market fell on Thursday, despite some encouraging macroeconomic data. The Bureau of Economic Analysis reported its third and final estimate for fourth-quarter 2013 real Gross Domestic Product (GDP) and growth was a little less soggy than we had been led to believe by last month’s second estimate, though still weaker than we saw in the third quarter of 2013. Real GDP growth came in at 2.6% (compared to the last estimate of 2.4% and 4.1% growth in Q3), just a touch lower than expectations.
The labor market continues to improve, based on the latest number of jobless claims. Initial claimants for unemployment insurance dropped to 311,000 last week, a decrease in 10,000 from the week prior, and was significantly better than the consensus estimate (a Reuters survey had forecast 325,000). The four-week moving average eases to 317,750, a drop of 9,500 from the week before and a six-month low and buoys hopes for March’s employment report, which is released on Friday April 4.
Despite this indication of an upturn in employment, stock prices have largely declined on Wall Street, with the Dow Jones Industrial Average slipping 0.24% or 40 points to 16,229 by early afternoon and the S&P 500 index dropping 0.23% or 4.2 points to 1848.4.
Natural gas futures for May advanced 1.14% by early afternoon on Thursday, after the Energy Information Administration (EIA), the reporting arm of the Energy Department, said that natural gas in storage fell 57 billion cubic feet (bcf) last week to 896 bcf total, following a 48 bcf draw the week previous. A decline of around 50 bcf had been expected and futures had been trading up about 0.6% before the release of the report. According to the EIA, temperatures in the 48 contiguous states have been 7% colder than last winter, contributing to an increased demand for natural gas to heat homes and businesses. Total stocks are more than 50% lower than the five-year average for this time of year.
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