Prime Minister Johnson will lead the daily coronavirus briefing in order to explain the steps the government has taken to ‘defeat’ the virus, although it is unlikely that full details will be given of how they intend to ease lockdown restrictions. The Pound has struggled to make any more major gains against the Euro and Dollar as Foreign Secretary Raab indicated that the lockdown is likely to be extended past 7th May over fears of a second wave of coronavirus cases. Raab also reiterated that the UK will stick to the current transition period deadline for UK-EU trade post-Brexit trade negotiations, which has put the Pound under pressure.
German consumer price inflation data came out better than expected at 0.3% compared to 0.0% that was predicted, giving the Euro some support yesterday. Germany has extended its warning against travelling abroad until 14th June in a blow to the EU’s tourism industry which accounts for 10% of the EU’s economic output. Eurozone preliminary flash GDP data, as well as the unemployment rate, will be released at 10am, which will set the tone for the common currency for the day. The ECB interest rate decision is due this afternoon at 12:45pm, which is expected to stay the same. This is followed by the ECB press conference at 1:30pm led by ECB President Lagarde which will be closely watched by the market.
President Trump has stepped up his criticism of China, indicating that there will be consequences for the way they handled the virus outbreak. If tensions increase between the US and China, the Dollar’s safe-haven status could become the focus once again. US economic growth contracted by 4.8% in Q1 2020, which is its worst performance since 2014. The Federal Reserve kept interest rates unchanged yesterday evening and suggested that a quick economic recovery is unlikely. They also pledged to keep interest rates low and provide further stimulus if need be. The weekly release of US unemployment claims is due at 1:30pm which is likely to cause some volatility.