UK data this week showed the jobs market remains resilient, with average earnings up to 3.6%, its fastest rate of growth for 11 years.
Unemployment remains at its lowest levels since the mid-1970s.
Inflation meanwhile, held steady at 2%, whilst retail sales were much stronger than expected.
We will have a new prime minister next week, and he will begin the unenviable task of trying to renegotiate the Brexit agreement.
In the US, the market is looking for an interest rate cut at the end of the month due to the uncertain inflationary outlook, with 0.25% priced in, though 0.5% remains a possibility.
Globally, slowing growth, trade frictions and increased geopolitical tensions are all weighing on sentiment.
On the exchanges, sterling remains under pressure on the economic weakness and increased risks of a no-deal Brexit.
GBP/USD dropped to 1.2400 this week, its lowest level since April 2017, before finding a short-term base. We would need a break above 1.2750 to alleviate the short-term negative sentiment.
GBP/EUR remains near its year-to-date lows, and needs a closing break above 1.1300 to gain some upside momentum. Strong buying interest remains ahead of last year’s low of 1.1000.
|25/7/19||ECB Deposit Facility Rate||-0.40%||-0.40%|
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2662||+5.21%|
UK Benchmark Rates
|3 month||0.76600%||2 year||0.74%|
|6 month||0.80200%||3 year||0.75%|
|12 month||0.86313%||5 year||0.81%|
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