Sterling strengthened last week from below 1.2300 at the start of the week to 1.2670 against the Dollar. From today, visitors entering the UK will be required to quarantine themselves for two weeks after arrival. Ministers have also targeted 22nd June as the date when they hope pubs and restaurants in England will reopen, serving customers outdoors.
On Friday we receive UK Monthly GDP for April, which will be closely watched for signs of how the economy fared in the height of lockdown.
The headline Non Farm Payrolls (NFP) showed that the US economy added 2.509 million jobs in May as compared to consensus estimates pointing to a loss of 8 million jobs. Adding to this, the unemployment rates unexpectedly fell to 13.3% as again market expectations for a big jump to 19.8% from 14.7% in April.
This Wednesday, the US Federal Reserve (FED) meets. A rate change is not expected, as Fed officials have signalled that they are waiting to see how the economy rebounds. However, markets will be watching for a response to the higher-than-expected employment numbers from Friday, as well as any other options the bank is considering in the event of economic setbacks caused by another spike in COVID-19 cases
The Euro ended its 8-day winning streak against the Dollar, which pushed the pair from May’s 1.0890 to a near three-month high just below the 1.1385 figure. The peak in the Euro was pulled back down on Friday’s better than expected US employment data.
The Common currency is however, on track to complete a three-week rally, amid signs of a moderate economic recovery plus the bold ECB action to support the worst COVID-19 hit countries and sectors have been the main driver of the steady Euro uptrend.
As of writing, the Euro trades just below the 1.13 level against its US counterpart.
Data to watch
06:00 - EUR - German Industrial Production
13:45 - EUR - ECB President Lagarde Speaks
Posted in Daily Market News on Jun 8 2020
GBPUK Construction PMI’s for May recovered to 28.9, a great improvement on April’s 8.2 but still below forecasts of 29.7. Business sentiment remains weak despite early signs of a recovery, the sector was beset by project cancellations, supply shortages and lengthening delivery times.VIEW FULL ARTICLE
Posted in Daily Market News on Jun 5 2020 by Rob Affleck