Following Prime Minister Johnson’s speech yesterday evening in which he set out his ‘road map’ for easing lockdown restrictions, the Pound has maintained its strength although any further gains have been limited due to concerns relating to post-Brexit trade negotiations with the EU. Today, PM Johnson will answers questions from Parliament and also from the general public. In addition, a 50-page document will also be published by No.10 Downing Street giving further details.

Chancellor Sunak is expected to announce an extension of the government furlough programme until September. As there is a lack of economic data today, the focus for the Pound will be on the latest round of UK-EU trade negotiations that are due to commence later today.

ECB President Lagarde has urged Eurozone economies to launch joint fiscal stimulus to help with the effects of the coronavirus, but did suggest that the pandemic has caused friction between some EU members. Tension between the Northern and Southern EU states have been the cause of Euro weakness as of late and is likely to keep the common currency from making any significant gains for the time being. ECB member Schnabel said that the central bank will allow their Pandemic Emergency Purchase Programme (PEPP) to continue until the end of the year and also indicated that they are ready to increase the size of the programme if need be. EU Commission President von der Leyen has suggested that the EU may take legal action against Germany, after a German court ruled that the ECB should not have been allowed to limit the amount of quantitative easing in Germany.

On Thursday, US unemployment claims came out at 3169K compared to 3000k that was predicted which caused concern in the market leading to the Dollar strengthening due to a more risk-off approach. However, on Friday US non-farm payrolls and the unemployment rate were released better than expected. As a result, the Dollar weakened as the market’s concerns were somewhat alleviated for the time being although the data did suggest that the impact on the US labour market by the coronavirus has been overwhelming. There are rumours that the Federal Reserve will lower interest rates in the US to 0% so any speeches made by Federal Reserve Chairman Powell and other FOMC members will be closely watched going forward. The Democrat-controlled House of Representatives are pushing for further fiscal stimulus in response to the recently published labour market data.