Good morning,
Overnight the New Zealand economy produced a very punchy manufacturing PMI number for June, coming in at 56.3 versus 39.8 prior. Given their relative success in mitigating damage from Coronavirus and the subsequent lockdown, this will help build confidence amongst other recovering economies as they forecast ahead.
The Bank of England will be hosting its first Citizen Panel Open Forum today, chaired by Andrew Bailey [11am BST]. This is a new public relations move to bring the BoE’s decision making process closer to the public and to allow them to voice concerns and ideas over the various elements of the economy like wages, inflations and jobs. Given the open nature of the forum and its wide reaching audience, it would be surprising if they dive into anything complex or technical but instead keep it broad and focused on the future. Watch out for commentary on negative interest rates.
Following on from the mixed Chinese data yesterday, especially Retail Sales, the picture is actually more upbeat than first reported. Global stocks were given a hard time yesterday as overall confidence took a knock, but in reality only 6 out of the 16 sectors are in contraction, with the rest putting in strong growth figures [some have recovered/increased in % terms more than the whole of the 2019 period].
Coronavirus cases in the US continue to drive fear into the markets, with a record 68,428 infections reported over the last 24hours. GBPUSD seems to be in a state of equilibrium, sitting at 1.2550 with neither buyers or sellers wanting to over commit.
There have been some mixed headlines from various EU heads of state regarding the recovery fund. The European Council President has very diplomatically stated that with political will, an agreement is possible. The Italians are upping the pressure and insisting the negotiations should be wrapped up by the end of this week, whist the Dutch believe the probability of a deal are less than 50%. There are so many moving parts to this equation and many are yet to fully align.
As holiday season approaches and flights to Europe and beyond get busier, it’s a great time to think about how you will manage your business or personal currency strategy whilst you’re away. Whether it’s forward buying to protect a certain period or placing orders at specific levels, we’ve got you covered.
Have a great Friday and a good weekend when it arrives.
Author: Jack Nicholls, Relationship Manager
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