Prime Minister Johnson is due to chair an emergency Cobra meeting today in order to decide if any additional measures are needed to deal with the coronavirus outbreak in the UK. In addition, Chancellor Sunak has said that the NHS will get ‘whatever resources it needs’ to combat the spread of the coronavirus.
The market is waiting for the all-important UK Budget due to be released on Wednesday before deciding the next direction for the Pound.
As Italy’s virus death tolls surpass 350 and travel restrictions are placed on 16m people in Northern Italy, there is growing pressure on the ECB to announce measures to help with any negative economic impact. Their policy meeting and interest rate announcement are due this Thursday, which will be closely watched. German industrial production data surprised the market this morning with a release of 3.0% compared to 1.7% that was forecasted. This has given the Euro a boost mainly against a weaker Dollar. German Finance Minister Scholz has said that he believes they are able to cope with any crisis due to their strong financial position.
On Friday, the US unemployment rate dropped to 3.5% whilst non-farm payrolls exceeded expectations at 273K compared to 175K that was forecasted, which initially gave the Dollar a boost. However, the greenback has opened weaker this week as the market has started to price in another 50 basis point interest cut by the Federal Reserve in order to avoid a recession in the US. With virus fears escalating as well as stock markets and the oil price falling, the market is likely to stay volatile.