Update -

Treasury Market Commentary

A weekly economic update from our Treasury team.

Published

11th June 2021

Category

Macro Commentary

The European Central Bank kept monetary policy on hold yesterday, despite some analysts looking for a tweak to their bond buying program. The EU has gained some real momentum with its vaccination program but remains far behind the US & the UK in terms of its recovery.

In the UK, the focus is very much on the announcement due next week on whether the economy will fully reopen on June 21st, or whether it is delayed due to the increasing concerns over the virus variants.

Outgoing Bank of England committee member Andy Haldane was very upbeat this week on the outlook for the UK economy, but emphasized how critical the jobs data would be once the furlough scheme ends. The UK housing market, meanwhile, continues to strongly outperform.

Tensions between the UK & the EU continue to escalate over Northern Ireland, with the EU threatening trade tariffs.

Global equity markets are trading near their all-time highs, helped by a more conciliatory dialogue between the US and China.

Meanwhile, the G7 is taking place in the UK with leaders focusing on the virus and climate change, as well as Northern Ireland.

On the exchanges, volumes remain light amid a real lack of conviction and ongoing economic uncertainty.

Lots of important data to focus on next week including inflation, jobs, and retail sales figures, as well as the US central bank meeting.

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 very much within the recent range of 1.1500 – 1.1700.

GBP/EUR – 1-year chart

Week Ahead

Date

Release

Last

Expected*

15/6/21

UK Unemployment Rate

4.8%

4.8%

15/6/21

UK Average Weekly Earns. 3M/YoY

4.0%

n/a

16/6/21

UK CPI YoY

1.5%

1.8%

16/6/21

UK RPI YoY

2.9%

n/a

16/6/21

US FOMC Rate Decision (Lower Bound)

0.00%

0.00%

18/6/21

UK Retail Sales YoY

42.4%

n/a

*Bloomberg survey / Not available

Foreign Exchange

Currency

Last

Currency

Last

EUR/USD

1.2185

USD/JPY

109.40

GBP/USD

1.4170

AUD/USD

0.7760

GBP/EUR

1.1630

GBP/AED

5.2050

USD/CHF

0.8940

XAU/USD

1901

Equity Indices

Indices

Previous Close

YTD % Change

FTSE 100

7088

+9.72%

S&P

4239

+12.86%

EUROSTOXX

4096

+15.30%

UK Benchmark Rates

Libor

 

Swap Mid (SONIA) ss((SONIA)

 

3 month

0.08375%

2 year

+0.15%

12 month

0.16588%

5 year

+0.44%


View Arbuthnot Latham’s Private and Commercial deposit rates.

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