Financial Markets Analysis by Lloyds TSB

The pledge by the G20 leaders to boost the lending facility of the IMF up to $1 trillion gave emerging markets and equities a shot in the arm this week.

Better than expected UK economic data support sterling

The pledge by the G20 leaders to boost the lending facility of the IMF up to $1 trillion gave emerging markets and equities a shot in the arm this week. The decision by the ECB to cut interest rates by a smaller than expected 0.25% also weighed on the dollar.

Hopes that the worst for the UK economy may be behind gathered support when manufacturing and services sector PMI’s showed stronger than expected results in March. Better than feared gilt auctions on Wednesday and Thursday showed respectable bidder participation and this also helped to put a floor under the pound.

Bond yields and swap rates were supported by stronger global equities, but will the rally continue?

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