Yesterday the European Central Bank (ECB) kept rates unchanged across the Eurozone at their first meeting since the Brexit vote. Economists were expecting no change to current rates, with the headline deposit rate remaining at minus 0.4 per cent and a 0.25 per cent rate on sums borrowed from the ECB by banks.
The bank's governing council said it "continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time ". The ECB confirmed that its monthly €80bn (£67bn) asset purchase program will run until at least the end of March next year - and perhaps for the longer, if the bank does not see "a sustained adjustment in the path of inflation consistent with its inflation aim".
The Pound struggled during the morning session after British retail sales suffered their sharpest monthly fall in six months in June, but stores said bad weather rather than Brexit was to blame, leaving open the question of how big a hit the vote to leave the European Union will deal to the economy.
Retail sales volumes in the five weeks to July 2 dropped by 0.9 percent with the weather cited as the main thing dragging down clothes sales, while department stores got a boost from the Euro 2016 football contest and the Queen's 90th birthday celebrations, it said.
The number of applications for U.S. unemployment benefits unexpectedly fell last week, reaching a three-month low as employers continue to retain staff amid improving growth and a shortage of skilled workers. Sustained low levels of firings also signal a strong outlook for the job market that will help lift household spending, the biggest part of the economy.
09:30 – GBP: Manufacturing PMI is forecast to fall to 47.8 from 52.1
09:30 – GBP: Services PMI is forecast to decline to 48.9 from 52.3