Markets Eye US Trade, MPC Testimony

Trade headlines continue to be in focus, today alongside testimony from newly appointed MPC Member Haskel.

Previous Day's Market Highlights

Yesterday was a quiet calendar which saw a correspondingly muted tone in currency markets. Sterling-euro held below 1.14 and sterling-dollar failed to re-break 1.33. Euro-dollar saw more movement, heading higher towards 1.17, a level it’s held below since 14 June, when the ECB announced it would wind down its QE programme this year but keep interest rates on hold until at least next summer. Sterling recovered weekend losses against the commodity currencies to trade at Friday afternoon levels.
 
Trade concerns remained in focus as the US considers further tariffs, weighing on risk sentiment and markets in particular.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1348 1.1498 1.1314 1.60%
GBP/USD 1.3270 1.3473 1.3102 2.75%
EUR/USD 1.1693 1.1853 1.1510 2.89%
GBP/AUD 1.7915 1.7981 1.7395 3.26%
GBP/NZD 1.9290 1.9339 1.8905 2.24%
GBP/CAD 1.7641 1.7791 1.7055 4.14%

Today's Market Highlights

The Bank of England is in focus this morning. MPC Member Haskel is testifying on his appointment to the MPC before the Treasury Select Committee (10:00 BST). MPC Member McCafferty, whose term expires at the end of August, will speak on monetary policy at the Official Monetary and Financial Institutions Forum. Markets will look for signals as to Haskel’s views ahead of August’s policy decision. Chief Economist Andy Haldane joined McCafferty and Saunders in voting for a hike at the June meeting, increasing market expectations of a possible August rise.  
 
In the afternoon, the S&P/Case-Shiller Home Price Indices release is forecast to be unchanged at 6.8%. Of more interest may be speeches from Fed Members Bostic (18:00) and Kaplan (18:45), although they’ll take place after the European close. Another fairly quiet day overall could keep exchange rates around current levels.
 
BoE Governor Carney holds a press conference on the Financial Stability Report tomorrow.

Today's Economic Calendar

Time Currency Release Consensus Previous
10:00am GBP MPC Member Haskel Speaks
10:30am GBP MPC Member McCafferty Speaks
2:00pm USD S&P/Case-Shiller Home Price Indices YoY (Apr) 6.8% 6.8%
6:00pm USD Fed Member Bostic Speaks
6:30pm USD Fed Member Kaplan Speaks
11:45pm NZD Trade Balance MoM (May) $100M $263M

Caxton