Macro Commentary

A quiet week on the economic front has meant that politics has continued to dominate the headlines. Unfortunately, the speculation and uncertainty will continue over the coming months as the conservative leadership race plays out.

Meanwhile tensions continue to rise in the US-China trade dispute, with both sides hardening their stance, which is of course weighing on global market sentiment. Trump’s further threats of tariffs on Mexico are only adding to global trade concerns.

On the exchanges sterling remains under pressure, whilst the dollar continues to benefit from safe haven flows.

GBP/USD remains just above its year-to-date lows around 1.2600, a sharp drop from 1.3200 earlier this month.

Sterling sentiment remains weak, but we do expect solid buying interest at 1.2500.

GBP/EUR continues to hold above 1.1300 for now, with the historically strong support level of 1.1200 now in focus.

GBP/USD – 1-year chart

Week ahead

Date Release Last Expected*
3/6/19 UK Markit Manufacturing PMI SA 53.1  52.0
4/6/19 EU CPI Core YoY 1.3%  1.1%
4/6/19 UK Markit/CIPS Construction PMI 50.5 50.4
5/6/19 UK Markit/CIPS Services PMI 50.4 50.6
5/6/19 UK Markit/CIPS Composite PMI 50.9 50.7
7/6/19 UK Halifax House Price 3Mths/Year 5.0% 4.9%
7/6/19 US Nonfarm Payrolls 263k 190k

*Bloomberg survey

Foreign Exchange

Currency Last Currency Last
EUR/USD 1.1145 AUD/USD 0.6925
GBP/USD 1.2620 USD/AED 3.6730
GBP/EUR 1.1325 GBP/AED 4.6370
USD/CHF 1.0050 EUR/AED 4.0930
USD/JPY 108.80 XAU/USD 1295

Equity Indices

Indices Previous Close YTD % Change
FTSE 100 7218 +6.38%
S&P 2788 +11.25%
EUROSTOXX 3283 +9.32%

UK Benchmark Rates

Libor   Swap Mid  
3 month 0.79575% 2 year 0.89%
6 month 0.89363% 3 year 0.91%
12 month 1.02388% 5 year 0.96%


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