Manchester Arena attack stuns the world
- EUR - Eurogroup Meetings
- GBP - Prime Minister May Speaks
- USD - FOMC Member Brainard Speaks
Geo-political concerns triggered by the UK news yesterday evening have sparked risk-off sentiment. At least 22 people were killed in a suicide bomb at an Ariana Grande concert in Manchester last night. It marks the worst terror incident on British soil since the London bombings of 2005 where 56 people were killed. In a statement from the Greater Manchester Police, the attack was carried out by one man who died at the scene after detonating an explosive device. We have seen a strong trend into the safe haven currencies as geo-political tensions dominate global headlines.
Yesterday, German Chancellor, Angela Merkel, blamed the ‘weak’ Euro on the German trade surplus, blaming it partly on the European Central Bank monetary policy. The weakness in the Euro has led to German products being cheaper resulting in them selling more. After the comment was made, a small strengthen in Euro was seen, pushing Euro/Dollar over the key psychological level. Exceeding this key limit could be an indication of a continuing up trend. Merkel also mentioned how the lower oil prices were to partly blame for this surplus too as it has reduced the cost of importing. This could put pressure on the ECB to tighten their stance on interest rates this year.
Back in the UK, Theresa May faced a disappointing result in the polls released at the weekend, with her lead dropping by half due to a few unpopular policies. May has U-turned on the plan for one of the most controversial policies. Speaking yesterday at both a conference in Wales and in a televised interview with BBC1, she mentioned there would be an ‘absolute limit’ on how much the elderly would contribute towards their care. After the attack in Manchester yesterday evening, the election campaigning has been suspended until further notice.
- EUR - German Ifo Business Climate: 114.6
- USD - Public Sector Net Borrowing
- USD - New Home Sales
Today, the Eurozone will be releasing the Flash Manufacturing and Services PMIs as well as the German Ifo Business climate. The Flash PMIs are the first of two versions of this figure to be released, so are likely to influence the market. Also, two of the largest countries of the Eurozone; France and Germany will be releasing their individual figures for the PMIs.
In the UK, we will have the inflation report hearing tomorrow morning where the BOE and MPC will testify the inflation and economic outlook before the Parliament’s Treasury Committee. During this meeting, volatility can often be expected.