Today's data releasesKey levels
09:00EU German IFO business climateGBP/USD1.3102
15:00US new home salesGBP/EUR1.1306

Market overview

On the last trading day of the week, the most notable development in markets was a sharp lift in crude oil prices, with WTI and Brent rising 4.6% and 3.4%, respectively. Clearly, market participants had anticipated that OPEC would opt for a larger output increase than the 1 million barrel per day that has been agreed at the Vienna meeting. Moreover, several members said that, in reality, the production increase may only be around 700,000 as some OPEC nations are already at full capacity.


Also on Friday Eurozone ‘flash’ composite PMI rose to 54.8 in June from 54.1 in May (consensus 53.9, Investec 54.5), principally as services recovered from recent weak readings and despite further (relative) sluggishness in the manufacturing sector. This adds to some evidence already published that the Euro area economy is beginning to emerge from its recent soft patch, much as we have begun to see in some of the UK numbers. However survey compilers Markit warn that some of the bounce back may well be due to the timing of holidays, which depressed the May readings and that trade related and political uncertainties were both restraining confidence. Overall though the survey details were mildly positive.


On Friday, we saw President Donald Trump threatening a 20% tariff on EU cars, after having already imposed punitive tariffs on steel and aluminium imports from Europe. The measure would deal a massive blow to the EU’s auto industry, as the European Commission estimates that such duties “could be expected roughly to reduce US imports of car and car parts in half”, according to an EC memo seen by Bloomberg. In a continuation of trade-war policies, the Wall Street Journal reported over the weekend that the Trump administration will ‘restrict Chinese investment in US companies and start-ups in sectors ranging from aerospace to robotics to railways.’ 

The week ahead

EU Leaders will meet again on 28-29 June. Several months ago this was billed as an important meeting for closing critical Brexit issues including on the shape of the UK’s future partnership with the EU. But talks have got tied up, not least because of disagreement over the required shape of the ‘backstop’ solution to avoid a hard border between Northern Ireland and the Republic. As such we expect little concrete news on Brexit from the Brussels gathering this week. At home, the government is likely to continue to prepare for upcoming Brexit Parliamentary debates on the customs and trade bills, with the ‘main’ EU (Withdrawal) Bill set to receive Royal Assent shortly.


There is also much data to get stuck into this week. Stateside we will see the publication of the third Q1 GDP estimate, May’s PCE inflation figures, June’s Conference Board consumer confidence measure and preliminary durable goods figures for May too. In the Euro area, ‘flash’ CPI inflation figures for June are due, where the ECB and others will be waiting with baited breath to see if the 1.9% May inflation reading is repeated and if the ‘core’ measure manages to eke out a rise. In the UK, we can expect the third estimate of UK Q1 GDP. With these national accounts figures produced on next month’s ‘Blue Book’ consistent basis, sizeable revisions to past GDP releases look likely. We suspect we may see an upward revision to the current Q1 estimate of +0.1. Alongside we will get Q1 UK current account figures. Bank of England mortgage approval numbers, net mortgage lending data and consumer credit figures are also due on what looks to be a ‘Super Friday’ for indicators.

Thought of the day

Kids have always been notorious for not wanting to eat their vegetables despite their parents’ best efforts. That’s not really news. But it takes an especially adamant and vindictive child to call 911 on his or her own parents because they simply tried to get their kid to eat a salad. Well, that’s exactly what a boy in Canada did when, according to the Canadian Broadcasting Corporation, he called 911 to tell them just how much he disliked the salad that his parents made for him. And he did it twice. When the unnamed 12-year-old from Halifax, Nova Scotia first called the Royal Canadian Mounted Police about the salad he’d just eaten, the police actually responded. They decided to send officers to his house in order to teach him about when it is and isn’t appropriate to call 911. However, before the police arrived, the boy apparently became unhappy with their response time and called 911 again to ask when they’d arrive and reiterate just how much he disliked the salad. Reporters asked RCMP Cpl. Dal Hutchinson what kind of salad prompted such an extreme reaction from the boy, but he couldn’t provide specific details. There was also no word on how the parents handled the situation. If you have ever felt a similar sense coercion when dealing with FX markets, don’t bother the emergency services but do call one of our dealers on 020 7597 4000 and let us help you create a strategy which gives you back control.

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