This morning, the UK unemployment rate came out and surprised the market with a release of 3.9% compared to the forecasted 4.2% level. The fact that many firms have put their staff on the government’s furlough scheme has helped. Nonetheless, the number of workers on payrolls fell by 649,000 between March and June. Analysts believe that the full extent of the impact that the pandemic has had on the labour market will be seen when the furlough scheme ends in October. MPC member Tenreyro has said that she would support further monetary action to help inflation return to its target level.

French final consumer price inflation data beat the market’s expectations at 0.1% instead of -0.1%. France believes that a compromise can be achieved this week on the proposed EU recovery fund which has kept the Euro strong, although the ‘Frugal Four’ are less optimistic. The focus for today will be the ECB’s monetary policy statement and press conference. They are expected to keep interest rates on hold at 0% but the market will pay attention to comments regarding any further measures that the ECB may introduce in the future.

Yesterday afternoon, US industrial production as well as manufacturing data was released better than expected which gave the Dollar some support against the Pound. However, the greenback has struggled to keep a strong Euro at bay. US weekly unemployment claims as well as retail sales figures will be released at 1:30pm which is likely to cause some short-term volatility for the greenback. US disease chief Fauci believes that there will be a coronavirus vaccine by the end of the year with some trials in particular showing promise.