GBP rises on inflation data

Consumer inflation

Consumer inflation slowed in April, but not as much as expected. Headline consumer price index (CPI) increased by 2.3% year-on-year (YoY), after 3.2% in March, but missed expectations of 2.1%. Core CPI rose 3.9%, missing expectations for 3.6%. Sterling rose on the news.

New Zealand's central bank

As expected, New Zealand's central bank held its cash rate steady at 5.5% but surprised the market with a rather hawkish statement. In its statement, the central bank said it had considered the possibility of increasing the cash rate. The bank raised its forecast cash rate peak to 5.7% from 5.6% and now expects to begin cutting the cash rate in the third quarter of 2025. It was previously forecast to begin cutting rates in the second quarter of 2025.

The Federal Reserve

Apart from the kiwi dollar, the greenback was broadly unchanged against other currencies this morning as the market awaits the publication of Federal Open Market Committee (FOMC) minutes tonight. Yesterday, Fed officials continued to call for patience. If The Federal Reserve (Fed) Governor Christopher Waller doesn't see rate hikes happening, progress back to the inflation target of 2% is a lot slower than previously thought.

Waller wants to see several more months of good inflation data before he feels comfortable supporting an easing in the stance of monetary policy. Atlanta Fed Chair Raphael Bostic also reiterated his call for patience. For Bostic, the Fed needs to be cautious about approving its first rate cut. He doesn't want to see if the Fed creates a situation where inflation starts "bouncing around."

Marks & Spencer

Elsewhere on the equity market, Marks & Spencer reported a 58% rise in annual profit, ahead of market expectations. Operating profit rose to £838.6 million, beating expectations of £806.4 million. British Land, SSE, and Severn Trent also published full-year reports.

Nvidia

NVIDIA is set to release its Q1 financial report tonight after the US closing bell, with expectations of delivering another record revenue and margin. The street expects earnings of $5.58 per share, a staggering 406% increase on the same quarter a year ago. Revenue is seen reaching $24.53Bln, up 234% YoY.

The top and bottom lines won't be enough to keep NVIDIA's share price where it is. Investors want to know whether Nvidia's Data Center has sustained its pace of growth. In the fourth quarter, revenue skyrocketed to a record $18.4 billion, marking a stunning 409% increase from a year ago. Margins is another point of interest. According to guidance from the previous quarter, Nvidia anticipates further improving its enviable margins from 72% in FY24 to 76%–77% in the first quarter of the new fiscal year.

Target

Target is due to report before the market opens. The retail chain is expected to report a 3.2% decrease in revenue to $24.51 billion. earnings per share (EPS) is seen at $2.06, which is near the top end of the company's own forecast.