UK GDP Beats Expectations Ahead of US Data

UK GDP data beat expectations in March as US retail sales and jobless claims take centre stage today.

European Session

The United Kingdom’s GDP report dominated the European session on Thursday, delivering results that surpassed analyst expectations across most metrics. March figures showed a notably solid performance, reinforcing the view that the British economy maintained considerable resilience before recent geopolitical developments began weighing on global market sentiment. While the data paints an encouraging picture, its significance is largely retrospective given the shifting macro environment.

Looking ahead within the European session, Spain’s Final CPI reading is the only remaining scheduled release. However, since the figure represents a final revision rather than a preliminary estimate, it is unlikely to alter the European Central Bank’s policy calculus in any meaningful way. As a result, market participants will probably look past the release with minimal reaction.

UK GDP Beats Expectations Ahead of US Data

American Session

Attention now shifts firmly to the United States, where two closely watched economic reports headline the afternoon calendar. Retail Sales figures for the month are forecast to come in at 0.5%, a notable step down from the prior reading of 1.7%. The ex-autos measure is similarly expected to moderate, with consensus pointing to a 0.6% gain against a previous 1.9%. Meanwhile, the Retail Control group — widely considered the most policy-relevant component because it feeds directly into GDP calculations — carries an expectation of 0.4%, compared to 0.7% previously.

Worth noting is that Retail Sales, while capable of moving markets in the immediate aftermath of its release, tends to be a volatile series. Traders frequently reverse initial price reactions as they reassess the broader trend rather than anchoring to a single month’s print.

Alongside retail data, the weekly Jobless Claims report will provide the latest read on labour market conditions. Economists forecast Initial Claims at 205,000, marginally above the prior week’s 200,000, and project that Continuing Claims will edge up to 1,780,000 from 1,766,000. Despite the modest expected increases, the broader trajectory remains constructive — Initial Claims have been hovering near cyclical lows, and Continuing Claims recently fell to their lowest level since 2024, indicating that layoffs remain contained and re-employment is occurring at a steady pace.

Against this backdrop, the Federal Reserve faces a familiar dilemma. So, with the labour market proving resilient and inflation moving in an unfavourable direction, policymakers retain little flexibility to consider rate reductions in the near term. Most people widely expect the Fed to keep rates on hold, even as some officials lean toward a more restrictive stance.

Central Bank Speakers

Several central bank officials will address markets throughout the day; their remarks could move markets depending on their tone and substance.

• 09:15 GMT / 05:15 ET — ECB President Christine Lagarde (neutral, voter)
• 14:15 GMT / 10:15 ET — Fed’s Schmid (hawkish, non-voter)
• 15:15 GMT / 11:15 ET — BoE’s Pill (hawkish, voter)
• 17:00 GMT / 13:00 ET — Fed’s Hammack (hawkish, voter)
• 21:30 GMT / 17:30 ET — Fed’s Barr (neutral, voter)
• 21:45 GMT / 17:45 ET — Fed’s Williams (neutral, voter)

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