Update -

Treasury Market Commentary

A weekly economic update from our Treasury team.

Published

4th June 2021

Category

Macro Commentary

Global inflationary pressures remain a key focus for the markets, as economies begin to recover from the pandemic. Both the Bank of England and the Fed insist that an increase in inflation will be temporary and it remains much too early to consider any policy tightening. Policymakers will likely allow an overshoot of their inflation targets until they believe the recovery is fully entrenched, with a robust jobs market being a key factor.

UK data has remained relatively buoyant, particularly the housing market. The focus remains, however, on the virus and the governments next stage of reopening on the 21st June.

The European Central Bank is meeting next week, and they too are likely to keep monetary policy on hold for the foreseeable future.

The EU is working hard to get the critically important tourism industry open again in the coming month, with their vaccination program now going very well.

The focus today is on the vital US jobs data due at 1.30pm.

On the exchanges, sterling strength remains the key theme.

GBP/USD has eased back from the 3-year highs of 1.4240 but continues to have strong buying interest at the pivotal 1.4000 level.

GBP/EUR remains near its recent highs around 1.1650, just ahead of some large corporate selling interest at 1.1700. Strong sterling demand remains at the 1.1500 level.

GBP/USD – 1-year chart

Week Ahead

Date

Release

Last

Expected*

8/6/21

EU GDP SA YoY

-1.8%

-1.8%

10/6/21

UK RICS House Price Balance

75%

n/a

10/6/21

EU ECB Deposit Facility Rate

-0.50%

-0.50%

10/6/21

US CPI YoY

4.2%

4.6%

11/6/21

UK Industrial Prod. YoY

3.6%

n/a

11/6/21

UK Manufacturing Prod. YoY

4.8%

n/a

11/6/21

UK Construction Output YoY

6.0%

n/a

*Bloomberg survey / Not available

Foreign Exchange

Currency

Last

Currency

Last

EUR/USD

1.2115

USD/JPY

110.20

GBP/USD

1.4105

AUD/USD

0.7670

GBP/EUR

1.1640

GBP/AED

5.1800

USD/CHF

0.9045

XAU/USD

1873

Equity Indices

Indices

Previous Close

YTD % Change

FTSE 100

7064

+9.35%

S&P

4192

+11.63%

EUROSTOXX

4079

+14.82%

UK Benchmark Rates

Libor

 

Swap Mid (SONIA) ss((SONIA)

 

3 month

0.07750%

2 year

+0.16%

12 month

0.16500%

5 year

+0.49%


View Arbuthnot Latham’s Private and Commercial deposit rates.

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