Sterling managed to recover from its..........>

CABLE: Sterling managed to recover from its negative reaction to the release of

disappointing UK Retail Sales data (this following earlier in the week releases

of UK Earnings data in the Employment Report and softer than expected CPI).

Cable dropped to $1.4161, recovered to $1.4246 on suspected M&A linked demand

(Takeda bid for Shire Gbp42.4bn) before it drifted back below $1.4200 as Shire

announced rejection(though said to remain in talks). Corrective pullback was

given a shove lower as BOE Carney comments in a BBC interview tended to suggest

a May hike not a done deal. Cable dropped to $1.4069 with recovery effort capped

at $1.4100 into the close. Rate consolidated through Asia between $1.4073-91,

with early Europe keeping the downside pressure on as rate eases on to $1.4067.

Eur/Gbp extends its recovery off recent lows of Gbp0.8620 with the topside of

its 1.0% envelope at Gbp0.8789 attracting(current level Gbp0.8772). Focus this

morning on BOE Saunders(0930GMT), seen hawkish and may place a positive counter

in the works for sterling. Cable support $1.4050/40, resistance remains into

$1.4100.