Sterling continued its march against the US Dollar to a fresh four month high. The move extended following the surprise outright majority in the UK General election for the Conservative Party on Friday. We also saw Sterling trade back towards a key psychological level against the Euro as the single currency fell for a third consecutive day. Speculation continues to mount that European finance ministers are far from an agreement to bail Greece out. This is the longest losing streak from the single currency for more than a fortnight as Greece is still needing to agree to economic reforms - in order to secure further bailout funding. Athens confirmed late yesterday afternoon that it has begun transferring a €750m payment to the IMF, quashing any rumors that Greece may have used this installment as a bargaining chip with their creditors.
The docket was fairly light yesterday as the Bank of England kept interest rates and its QE measures on hold as expected. The main focus for the BoE this week will be the release of the inflation report on Wednesday. There is particular interest in the rhetoric at this event as two members of the MPC revealed that they were close to voting for a rate hike at the last meeting. The voting pattern and minutes for yesterday will be released in a fortnight.
Looking to the day ahead, there will be particular attention paid to the ongoing Greek debt situation. The ECOFIN meeting is happening today with the situation in Greece high on the agenda. In the UK, price action could be dictated by the manufacturing production numbers which despite still growing are expected to show a slower growth than last month. Following on from the payrolls data in the US, there will be particular focus on the Jolt Job Openings data.