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  • richard evans

GBP attempts to hold onto yesterdays gains

Good morning

GBP has an interesting push higher yesterday afternoon which lifted it from 1.2485 to 1.2600 GBPUSD touching on 1.2600, EURGBP just below 0.8500 (GBPEUR 1.1765) which is quite a turnaround from this time yesterday. I’ve not seen anything to really explain the move, particularly as reports suggest we will see legislation published next week to allow UK to override some areas of the NI protocol, something I’d have thought would put GBP under pressure. As I type GBPUSD is off the highs at 1.2555 and EURGBP at 0.8510 (1.1750)

Some attention on US firm Target Corp, a dept store chain who have warned it has far too much inventory and have reduced their quarterly earnings outlook. The fear is this will be the same story with other retailers and could shake confidence in the US economy. US and Asian indices are generally positive however. US dollar seems fairly stable but has made gains against JPY with USDJPY up now to 133.40, dragging EURJPY up above 142.50.

ECB tomorrow, we wait to see whether ECB will signal a rate move for July. In the meantime I see Draghi has used special powers to block a Chinese firm from getting more involved with an Italian tech firm, Robox. EU GDP today is the second reading so market impact should be limited unless we see major revisions. Still see interest in longer dated upside EURUSD although therer doesn’t seem to be much rush to get into new positions. 1.0760 and 1.0800 key upside levels of note.

Just as Love Island hits our screens, a new reality show also begins. This one is called The Bridge, where two sets of slightly dysfunctional people have to race to build a bridge that will get them to a prize of £200,000, although only one person will win that prize. Its going to have lots of twists and turns along the way, participants will be encouraged to work against each other and looks like there will be votes to oust people from the groups. I reckon this should have a bit of everything, hope I’m not disappointed.

That’s all for now, with a fairly light economic calendar there could be a day of admin ahead….

- 09.30 UK S&P construction PMI

- 10.00 EU GDP, employment change

- 15.00 US wholesale inventories

- 00.01 UK RICS house prices

- 03.00 China trade balance

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