Already released this morning, UK earnings growth eased to 5.7 percent (previous 6%). Unemployment remained at 4.4 percent suggesting the labour market is healthy.
This afternoon, we have the European Central Bank interest rate announcement. The ECB dropped rates last month from a record high of 4.5 percent; inflation and wage growth remains high in the Eurozone, so markets are pricing in a September rate cut.
The ECB policy decision will be followed by Christine Lagarde’s news conference. Investors will keep a close eye on her comments to grasp her outlook on future rate cuts and how the EU economy is fairing.
In the States, Fed policymakers hinted that inflation is moving in the right direction, however, they want the US Federal Reserve to be patient as there is possibility inflation might rise again.
Pound Sterling protected its recent gains after UK CPI inflation released above the market consensus, apply pressure on the Bank of England to hold interest rates in August.
GBPEUR is trading 2 percent over its yearly average moving rate. GBPUSD has lost some of it gains but is still at its highest level this year.
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