Good morning,

Yesterday, the UK and EU negotiators were back together to discuss the Northern Irish border. The pound fell off throughout the day as the EU warned they are open to imposing tariffs if the UK look to delay the agreed Post Brexit checks on goods entering NI from Britain. Talks will continue as no resolution has been found. It also saw the Bank of Canada maintain its current policy in holding interest rates at their current 0.25% level whilst maintaining its projections that were offered in their April Monetary policy report. They are optimistic enough in the reopening of its economy to continue their current policy to slowly tighten monetary policy every other BoC meeting. The CAD was able to continue its hold on the 1.70 level vs the pound off the back of this.

Today we have a much more data driven day as the ECB rate decision is due after midday, the US CPI numbers for May as well as YoY are US Jobless figures are both reported. The ECB are expected to hold rates as they are again, but could well signal a slowdown to their bond purchases in the coming months. This would be a show of strength for the EUR so keep an eye out for how this performs from 1.30pm today. The US will be looking to continue its run of the jobless numbers reducing and the CPI figures could well bring inflationary concerns in to focus and with that interest rate hike conversations.

As each economy becomes more confident, policy changes can start to bring more volatility to the markets so please do contact your account manager if you have any exposures you are concerned about.

Have a great day.

Author: Chris Allan, Senior Relationship Manager

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