Morning Update – Vacances d’été

Morning all

Exciting part of the week approaching fast, hence why Theresa May is cutting her holiday short!

GBP

Joking aside the PM is cutting her Alpine break short to ‘crack on’ with Brexit talks at Emmanuel Macron’s holiday home. Merkel and Macron were urged yesterday by Britain to use their influence to make Brussels understand the importance to Europe of striking a “pragmatic and sensible” Brexit deal. Why is this relevant to you? Well, leaving the EU without an agreement would damage businesses and jobs both in the UK and EU due to weakness in GBP and the fresh wave of red tape which will suffocate free movement of goods and services.
Nothing in the calendar today for the UK, all eyes on the interest rate decision and press conference tomorrow. Now a 90% chance (Reuters) of a hike to 0.75% from 0.5%.

USD

Today is the US’s turn to bolster down their interest rate for the next quarter. Economists believe the decision and press statement, is to pass by with very little fanfare with interest rates in the US expected to hold at 2% with a further 2 hikes planned this year.
Headlines are currently saturated around trumps administration plans to propose higher tariffs on $200 billion in Chinese imports. The jury is out as to whether this is just another clever negotiation tactic to maintain the USD strength we’ve been seeing of late.
Expect a more interesting day on Friday from the US with Nonfarm Payrolls and unemployment figures taking centre stage.

EUR

Manufacturing figures have come out generally as expected this morning from the EUR zone, however Germany worryingly missing the mark. Something we will monitor as the year progresses. No reaction in the market currently with GBPEUR holding a steady flat trading range, consumed mainly by what is going on with GBP (above).

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