The Bank of England is expected to keep interest rates on hold at 0.1% at the monetary policy meeting due at midday. However, they are predicted to increase their level of quantitative easing which has put the Pound under pressure for the time being. US negotiator Lighthizer has said that a UK-US trade deal is unlikely to be signed off until after the US presidential elections in November. Germany has written to other EU member states warning them that a no-deal Brexit needs to be prepared for as they are now convinced that the transition period won’t be extended into 2021.
Eurozone consumer price inflation came out as expected at 0.1% yesterday morning which led to a slowdown in momentum for the Euro. A French official has reportedly mentioned that the proposed EU recovery fund is likely to be agreed to next month. Bundesbank President Weidmann told German MPs yesterday that he is confident that a resolution can be found with the ECB over their bond-buying programme and has suggested three solutions.
US Secretary of State Pompeo has met Chinese officials who agreed that cooperation between the two parties is the way forward but warned the US to stay out of Chinese affairs. In response to the latest outbreak of the coronavirus in Beijing, President Trump has said that he won’t close the country again if a second wave arrives in the US. FOMC member Mester believes that Q2 GDP data could show the largest quarterly decline on record but expects the economy to pick up in the second half of the year. US weekly unemployment claims are due at 1:30pm which is likely to cause some short-term volatility.