Reports have emerged that Prime Minister Johnson is ready to accept tariffs set by the EU on some goods in order to make progress with post-Brexit trade negotiations which has given the Pound a boost against both the Euro and the Dollar. A government spokesman has confirmed that they are aiming to reopen non-essential retail shops from 15th June which is also a welcome sign of lockdown restrictions easing.
Following on from worse than expected German industrial production figures yesterday morning, Eurozone consumer confidence data also disappointed the market and led to the Euro weakening. ECB President Lagarde had advised European members to adopt the stimulus program that the European Commission has put forward. Revised GDP figures for the EU that will be released this morning and is likely to show that the economy contracted by 3.8% in Q1.
The market is waiting for tomorrow evening’s Federal Reserve interest rate decision and accompanying statement as well as the FOMC press conference for any announcement of further economic stimulus. This is likely to cause some volatility as market participants will scrutinise any comments from FOMC members. The Dollar has continued to weaken as lockdown restrictions continue to be eased globally, leading to investors having a more risk-on approach for the time being.