Before we get into markets- on Sunday, President Biden announced that he will be dropping out of the election- this was after rumours throughout the week that he would be doing this, however usually Politicians wait until markets are closed before making such announcements. This now adds some uncertainty into the election, Biden has thrown his support behind his VP, Kamala Harris, but during the next week or so we should find out who is the Democrat candidate to run against President Trump- for now I think this is a positive move for the Democrat party, I am just unsure if they have a candidate popular enough to beat Trump this year, but we will see!
Moving back onto markets, a market-wide equities sell-off late last week hit GBP exchange rates bringing GBPEUR back to 1.19 and GBPUSD back to 1.29. On Monday we should hopefully see buyers show back up and potentially a move higher on Sterling. Looking at economic data, Monday is a pretty quiet day so we will be driven by general market activity, on Tuesday the only release of note is flash EU consumer confidence which is expected slightly better than the previous, but still negative, so this should probably be a non-event for the Euro.
Wednesday is PMI day, with flash PMI releases from Europe, UK and the U.S- General consensus is that Europe’s PMI will be positive, The UK’s will also be positive, and the U.S PMI’s will be down a little- so generally a good day for GBP and EUR is expected. Later we have the Bank of Canada rate decision where we are expecting a cut down to 4.5%- this will be their second rate cut in this cycle and is widely expected so shouldn’t be much of a volatile event.
On Thursday we have U.S Durable goods orders and GDP releases- Both are expected up and should be a positive event for the U.S Dollar, so this will be a day to watch out for if you are trading GBPUSD and EURUSD, and may be an opportunity for both rates to maybe go a littler lower. On Friday we have Core PCE price index out of the U.S which is expected higher and Michigan consumer sentiment which is expected a little lower than last time, Overall it should be a pretty volatile week, if you require any assistance please don’t hesitate to contact me.