A good start to the week for the pound following last week’s above-consensus UK inflation print and announcement of a General Election.
The pound has benefited on the back of this and is showing promising signs of strength heading into the new ‘shorter’ week.
Markets are now not expecting to see a rate cut in June and the earliest opportunity for a rate cut to happen would be August.
For the EU, there were several ECB policymakers speaking yesterday. They spoke about the likelihood of an interest rate cut at next week’s policy meeting and one suggested that there may be a further immediate reduction in July.
Markets have fully priced in a reduction on the headline rate on 6th June that has seen the euro weaken.
This afternoon for the US, we have the Home Price Index and Conference Board Consumer Confidence Survey.
The US dollar remains under pressure against both the euro and the pound as the latest measures of consumer confidence in the US have been declining of late, possibly due to the slump in inflation and lack of interest rate cuts.
For the UK and Eurozone it is a quiet day, therefore markets will shift their attention to tomorrows German inflation figures, Wednesdays US growth figures and Fridays French Inflation and growth figures.