Today's news headlines:

'UK economy unexpectedly shrinks as prices surge.' UK GDP fell 0.3% between March and April, missing analysts' forecasts of 0.1% growth and revealing the impact of the cost-of-living crisis on economic activity. The services sector, which contributes the most to the UK economy, fell 0.3%, while production and construction fell 0.6% and 0.4%, respectively. This morning, Chancellor Rishi Sunak commented 'I want to reassure people, we're fully focused on growing the economy to address the cost of living in the longer term.' (Financial Times)

'China extends restrictions as cities struggle to stamp out Covid infections'. Mass testing and lockdowns have returned to China's biggest cities to prevent the spread of Covid-19. Districts in Beijing and Shanghai delayed the easing of existing restrictions. They introduced new measures after clusters of cases appeared in commercial and nightlife districts. Shanghai suspended dine-in services at restaurants after exiting a two-month lockdown less than two weeks ago. (Financial Times)

Today

Markets open the week risk-averse, as the US Dollar Index climbed for a fourth consecutive day. Sterling opens the week below the 1.23 figure after the UK economy unexpectedly shrank in April. Global equities slipped, and oil prices fell to $118 a barrel.

Events

Japanese BSI Manufacturing Index: -9.9 (est. -4.2)
UK GDP MoM (Apr): -0.3% (est. 0.2%)
US Federal Open Market Committee member Lael Brainard speaks: 7:00PM

Interbank rates:

​​​​​​​​​​​​​​GBP/USD – 1.2245
GBP/EUR – 1.1695
EUR/USD – 1.0470
USD/CAD – 1.2830

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