The biggest event through yesterday was no doubt the meeting between US President Trump and Russian President Vladimir Putin. There was nothing really to shake markets nerve directly from the meeting and generally risk appetite remained positive with stocks trading higher across the board overnight, before running into some selling overnight. Reading all various forms of press, the feedback has been more negative for Trump. Back on US soil he appears to be criticised from all angles and even in his own government both Republicans and Democrats have been critical of the meeting or the way Trump acted in the meeting. He failed to address any key issues and even sided with Putin on the “witch hunt” by US intelligence against Russia. The general feedback is that Putin was the master of that meeting with Trump having little control.
Closer to home and back to the UK where PM Theresa May survived another battle with the customs bill passing with a vote of 305 to 302. She will no doubt have further questions to answer over the coming few days ahead of Thursday, where parliament will finally break for summer recess. In the meantime the Vote Leave campaign has been fined by the UK electoral commission citing serious breaches of the law. Not too surprising to those of us who questioned the validity of a huge amount of the information that was being distributed. But it’s all too late now and while PM May continues to battle to deliver something that looks like Brexit but without the punishing impacts, our focus will be back on UK data. Today and tomorrow we have a whole host of figures and thus far this week GBP has faced some light selling. Jobless Claims and Earnings out today will be the focus, key release will be on wage growth expected to tick up 2.5% through May, while tomorrow we await CPI readings due to show inflation has risen to 2.6% from 2.4%. This may see some increased argument for the BOE to raise interest rates in August, especially if real income is now falling. Ahead of that though, today we’ll be closely watching BOE speakers Carney, Cunliffe and Stheeman speak on financial stability.
There’s very little on the cards from the Eurozone today so we’ll be taking a look stateside for more action this afternoon. Later this evening the Fed’s beige book of economic sentiment will take some attention but first up and likely of greater impact with be the Fed Chairs first sitting before the House panel. We’ll be looking for any signs of strengths or weaknesses in the Chair’s outlook, and indeed to see if his rhetoric remains on course for an additional two rate hikes from the Fed this year.
Larger ranges remain very much intact across major pairs. EURGBP range remains .8820 up to .8870/.8900 region. EURUSD happy to play between 1.1500 and 1.1850, with an internal range in there between 1.1630 up to 1.1800. While GBPUSD 1.3050 up to 1.3330 has held for over 1 month.