The pound is little changed this morning after the Conservatives sealed a deal with the DUP yesterday.
Ahead of the Queens speech vote in Parliament on Thursday, the Conservatives hope the deal will be enough to prevent a vote of no confidence.
As part of the deal, Northern Ireland is to receive an extra £1 billion over the next two years in exchange for the DUP’s support, ensuring Theresa May’s government remains in power. There is however uncertainty over how long Mrs May will remain as leader, amid rumours of a leadership contest within the Conservatives.
The Bank of England could cause a few ripples for the Pound from 10:30 this morning with the release of its latest financial stability report. Last week Monetary Policy Committee member, Andy Haldane, signaled that he may start voting for rate hikes in the coming months.
It the first time Mark Carney will have spoken in public since Andy Haldane issued his hawkish rebuttal last week.
US durable goods orders were weaker than expected in May, data showed yesterday, falling 1.1% versus an expected drop of 0.6%. The previous months’ figures were revised down a touch as well. The figures show that orders fell the most in 18 months highlighting the fact that manufacturing output is barely growing in the US.
Part of Donald Trump’s travel ban will go into effect on Thursday at which point a 90-day ban on Muslims entering the US will come into effect. The main exception includes foreign nationals who have a credible claim of a bona fide relationship with a person or entity in the United States.
Today see’s two FOMC member speeches with the first from Mr Harker at 16:15 and then Chair of the Federal Reserve, Janet Yellen at 18:00.
News over the weekend about the Italian government’s 17 billion Euro rescue package to shore up 2 failing banks seems to have had very limited impact on the Euro as market participants keep their faith in the ECB who vowed in the past to do “whatever it takes” to save the Euro.
In a speech this morning, ECB president Mario Draghi commented that the Eurozone still needs “considerable” monetary support from the European Central Bank.
Draghi stated “All the signs now point to a strengthening and broadening recovery in the euro area. Deflationary forces have been replaced by reflationary ones,” and commented further , saying “However, a considerable degree of monetary accommodation is still needed for inflation dynamics to become durable and self-sustaining.”
So for now the ECB will continue to prop up the Eurozone economy through its Asset purchase programme (aka QE) with the Euro most likely gaining ground over the coming days due to positive bias.
10.30 am – Bank of England Financial Stability Report
11.00 am – Bank of England Governor Carney speech
16.15 pm – FOMC Member Harker Speech
18.00 pm – Fed Chair Yellen Speech
14.30 pm – Bank of England Governor Carney speech
14.30 pm – ECB President Draghi Speech
15.00 pm – US pending home sales (May): expected to rise
10.00 am – Eurozone consumer, services, industrial and business confidence (June): All forecast to rise
13.00 pm – German CPI (June, preliminary): expected to rise to 1.4% YoY after 1.5% increase a month earlier
13.30 pm – US GDP growth (Q1, final): Growth of 1.2% expected QoQ, no change from previous estimations
13.30 pm – US initial jobless claims (w/e 24 June): jobless claims expected to be 240K from 241K a week earlier
02.00 am – China manufacturing and non-manufacturing PMI (June): manufacturing survey expected to be 51.0 from 51.2, while the non- manufacturing number expected to rise from 54.5
08.55 am – Germany unemployment (June): rate expected to hold at 5.7%, while the number of unemployed expected to fall by 10,000
09.30 am – UK GDP (Q1, final): growth expected to be 0.2% QoQ and 2% YoY
10.00 am – Eurozone CPI (June, flash): expected to be 1.2% from 1.4% YoY, while core CPI expected to hold at 1%
14.45 pm – US Chicago PMI (June): expected to fall to 58 from 59.4