Action- Insight- Daily -Report 5-21-09

Sterling Looking to Retail Sales to Extend Recent Strength

Sterling remains firm after recent strong rally and is looking forward to a solid retail sales report to extend recent strength. UK retail sales are expected to have gained 0.5% mom in April following an increase of +0.3% in the previous month as the Easter holiday should have boosted spending. Retail indicators, such as CBI and BRC, suggested a good reading in April, too. On annual basis, the gauge should have gained +2.5%, better than +1.5% in March. Public sector new borrowing should have soared 6.5B pound in April following a 19.1B pound rise a month ago. M4 money supply is anticipate to have surged +0.5% mom in April (March: +0.2%) with a high rate of growth of lending to financial sector.