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The pound made marginal losses against the euro yesterday but remains over 1% higher on the month
The pound ended Monday marginally lower against the euro and remained largely unchanged against USD.
Wages in the euro area grew by 5.3% year-on-year in the first quarter of 2024 following an upwardly revised 3.2% increase in the previous period. This marked the biggest rise since the final quarter of 2022. This result exceeded expectations and aligns with the European Central Bank’s (ECB’s) view that wage pressures are set to remain high before entering a downward trajectory in 2025.
Christine Lagarde, ECB president, said yesterday that officials are being “attentive” to financial market developments shortly after her chief economist, Philip Lane, shared sanguine statements about the French uproar last week, sharing that he wasn’t worried.
Ireland’s trade surplus rocketed to €8.8 billion in April 2024, considerably more than this time last year (€4.36 bn). This trade surplus was the most since January and was largely fuelled by a 25% in exports, despite imports contracting by 5.5%.
In China, house prices slumped at the fastest rate in almost a decade due to an excess of new properties on the market. The price of new homes in 70 cities (excluding subsidised housing) fell by 0.7% from April, reflecting the steepest drop since October 2014.
Early this morning, we heard the Reserve Bank of Australia kept its cash rate at 4.35%, matching market expectations and remaining unchanged for the fifth consecutive month.
Later today, we will receive the latest statistics from the German ZEW Economic Sentiment Index, which is expected to improve from May’s 47.1 to 49 in June, and US retail sales, which are expected to have grown by 0.2% in May.
Tomorrow, all eyes will be on the UK inflation figure for May, which could still influence the Bank of England’s rate decision on Thursday.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 3918 7255 to get started.
GBP: Bank of England set to hold rates
The Bank of England is expected to hold interest rates in its June meeting, however, investors believe there is still time for inflation to rock the boat, should tomorrow’s inflation reading not match expectations. Headline inflation is currently at 2.3% and markets expect it to fall to 1.9%, if matched, this will be below the Bank’s 2.0% target for the first time since July 2021.
GBP/USD: the past year
EUR: Paris loses title as Europe’s largest equity market
In reaction to political uncertainty in France following Macron’s snap election last week, the value of Euronext Paris stocks fell by around $258 bn in a week, putting it behind the London Stock Exchange.
GBP/EUR: the past year
USD: US stocks soar
Wall Street stocks hit a fresh record high on Monday as Big Tech names made significant gains. The benchmark S&P 500 added 0.8%, Nasdaq added 1%, while Apple added just under 2% and Microsoft rose 1.3%.
EUR/USD: the past year
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