Forex Today: GBP outperforms in Asia, IFO, US durable goods, ECB Draghi - Key
|Another great start for the British currency this Monday, replicating Friday’s outperformance in Asia, as risk-off returned to the markets amid oil-price recovery and renewed hopes of a deal to be reached between the UK PM May and DUP, when the DUP leader Foster meets Theresa May later in the European morning.
The Antipodeans too remained better bid amid broad based US dollar softness, although gains were limited by renewed demand for the US yields, which dampened the demand for the Emerging Market currencies as alternative higher-yielding assets.
Looking ahead, we have plenty of risk events on the cards this week, with a mix of central banking speech from across the globe and key macro news in terms of the GDP figures from the US and UK. The immediate focus, however, now remains on the German IFO surveys, US durable goods data and ECB President Draghi’s speech slated for release in the day ahead.
Main topics in Asia
The BoJ has just released the Summary of Opinions' for the June 15th and 16th meeting. Within them, the BoJ states that the Japan's economy has been turning toward a moderate expansion.
Brexit Secretary David Davis, while talking to BBC’s Andrew Marr on Sunday said, “I would be prepared "to walk away" if the UK was given a "punishment deal”. We have to plan for that."
Italy to bail out two more banks after ECB warning
Italy’s government will be bailing out Banca Popolare di Vicenza and Veneto Banca at a cost of EUR 5.2 billion.
Goldman Sachs assesses a 1/4 chance of US recession over the next two years
Goldman Sachs’ economists out with a latest note on Monday, assessing the risk of a recession for the US.
Key Focus ahead
Germany: IFO expectations to decline to 106.1 in June – Danske Bank
In the euro area, the German Ifo expectation is due for release today and analysts at Danske Bank expect this figure to decline to 106.1 in June.
DUP leader Foster to meet with UK PM May Monday morning
Sky News correspondent, as cited by Reuters, noted that the Democratic Unionist Party’s (DUP) leader Arlene Foster is arriving in London this Monday morning to meet the UK PM May.
Eurozone: German IFO and ECB conference in focus - TDS
Analysts at TDS point out that German IFO data and the start of ECB’s Sintra conference will be the most watched event for today’s economic calendar as far as Eurozone is concerned.
The week ahead: United States - Nomura
Analysts at Nomura explained that for the week ahead in the US, the relevant elements of the May PPI and CPI inflation reports point to subdued core PCE inflation in May.
The week ahead: Europe - Nomura
"German Ifo (Monday): We expect the German Ifo business climate index to increase to 115.2 in June from 114.6 in May.”
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