The start of the week begins with a raft of Euro data.
Today’s EU Business & Consumer Confidence and German CPI data will be closely watched for signs that the eurozone is growing.
German inflation will be of particular interest, especially for the ECB. French Inflation Is due tomorrow. Should inflation come in above the expected levels, we could see some euro strength as this will decrease the odds of an ECB rate cut in July.
There is no UK or US data today, therefore markets will be dictated by today’s euro data.
The key focus this week will be Wednesdays US Fed policy announcement. Markets will be super keen to see what the Feds latest policy update will reveal and the timing of rate cuts.
At the beginning of the year there was a lot of talk on how many rate cuts we would see in 2024, this has now changed dramatically, although Fed Chair ‘Powell’ has insisted that interest rates may be cut in June.
The pound has held onto its late gains against the euro over the weekend sitting at a near two-week high. GBPUSD sits well under its highs at the start of the month but has gained some momentum of late, clawing back 1.5 percent last week.
In terms of data this week, for the UK we have the Consumer Lending on Tuesday, Nationwide house Price Index on Wednesday and PMI (services) figures on Friday.
For the US, key data other than the Fed policy announcement will be Fridays Non-Farm Payrolls.