The main news continues to be the upcoming general election which is driving price action at the moment and will continue to do so until June the 8th when voting takes place. Volatility is beginning to pick up as well, over the last trading day GBP/USD volatility has increased by 13% and as June the 8th nears we expect to see further violent swings continue this week and next. Yesterday evening, senior politicians from seven parties went head to head in a live televised debate. However, the Prime Minister Theresa May, did not appear as she has refused to take part in any face to face debate. The debate discussed immigration, a possible coalition, Brexit and how the parties were going to fund their policies. Also released overnight was a new poll slashing the Conservatives lead down to only 3%.
Meanwhile in the Eurozone, CPI, Europe’s main indicator of inflation failed to meet the economists’ consensus yesterday morning posting 1.4% for the year. The ECB’s target is the same as the UK’s at 2%, therefore the reading is still relatively healthy. We also had the headline unemployment rate for the region released simultaneously. Eurozone unemployment posted a better than expected 9.3%, leading to a relatively stable Euro as the contrasting figures steadied the currency.
Another busy day scheduled on the economic calendar. We have the UK manufacturing PMI due for release this morning, the ADP non-farm in the afternoon and from the States the ISM manufacturing PMI.