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After the poor manufacturing data on Friday, UK PMI Construction was most welcome yesterday. It grew faster than expected last month, almost to the high level we saw in February. This would have reassured investors but inflationary pressures are still too high to feel we are in the clear in terms of a strong recovery. Most attention is drawn still to Thursday and the ECB and BoE interest rate decisions making anything else seem minimal and causing stress across the markets.

EU PPI came out worse than expected at 6.6% yesterday morning, but it was up from last year at 5.9%.  It came in as 0.8% in February so that was a drop over the month and caused euro to weaken a touch, but it soon regained ground. Irish news continues to be bleak, as the country’s budget deficit stood at 7.1 billion in March compared with the shortfall around the same time as last year of 3.9 billion. This was an increase of about 4% thanks to income tax and sales tax revenues coming in below expectations. While Portugal’s bond ratings have been cut to Baa1 from A3 by Moody’s.

Republicans and Democrats continue to clash over the US Budget, with Republicans remaining stubbornly waiting for deeper spending cuts, which is infuriating the Democrats. Congress has already agreed to USD 33bn worth of reductions this year and is almost at an agreement but need to compromise by the April 8^th deadline. Meanwhile Obama has kicked off his 2012 re-election campaign and seems to be ahead of the Republicans who are yet to find a candidate. In other news, BP has been authorised by US regulators to return to drilling in the Gulf of Mexico as early as July, with part of the agreement involving 24 hours government overseers.

There are a couple of juicy bits of data out today, with UK and Eurozone PMI Services data after 9am, this is expected to remain the same. The Eurozone also have their retail sales figure and in the US they will see the ISM Non- Manufacturing figures at 3pm.

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Latest exchange rates at time of writing