We saw GBP exchange rates soften after a strong run up to the Bank of England interest rate decision on Thursday, the reason for the sell off was more of a “Buy the rumour, sell the news” event as no shift in monetary policy was expected- and it seems traders wanted more from the BoE. Both GDP and inflation forecasts were upgraded (Positive) however, and rightly so, no real change or shift in interest rate guidance just yet.
Looking at the week ahead of us- the first thing we are looking for is any potential risk off after the resignation of UK health secretary Matt Hancock (None expected for me personally, he has already been replaced so should be no reaction from markets) – if the markets really wanted to, they could draw a risk link between this and the cases rising again in the UK, but it wouldn’t last long, just something to be aware of if we see a slight Sterling drop on Monday. I am looking for more upside in GBP this week after the sell-off on Thursday afternoon, market permitting of course.
As this week is last week of June and first week of July- we have a few noteworthy releases which I have detailed below- generally we are watching the same things at the moment, vaccinations, cases and hospitalisations, inflation, employment and spending. Next reopening dates in July will be of most interest in regards to what we look for next in economies.
Monday
Speeches from BoE’s Haldane, Williams from the Fed and Guindos from the ECB.
Tuesday
European consumer confidence and economic sentiment.
Germany inflation rate.
ECB President Lagarde Speech.
Thursday
Germany retail sales
European Manufacturing PMI
UK Manufacturing PMI
European Unemployment
U.S Jobless Claims
U.S Manufacturing PMI
Friday
U.S Non farm Payrolls
U.S Unemployment