Daily Market Report 23/05/16


The Pound ended Friday slightly lower having retraced the gains it made earlier on last week. Boosted by robust UK retail sales and a swing in favor of the "Stay in" EU campaign, sterling rallied to its best weekly performance in seven months.
Gertjan Vlieghe, an external member of the Monetary Policy Committee (MPC), signaled that he would vote for more stimulus even if the UK voted to remain in the EU next month and he did not see "convincing evidence" of a rapid improvement in the economy. Suggesting  that the short term uncertainty around the Brexit has proven to be a drag on growth in the UK with the Bank of England expecting the UK economy to expand by just 0.3% in the three months to June, from 0.4% in the first three months of the year.


Last week also signaled much positivity  in the US dollar stemming from hawkish comments from the Federal Reserve  who gave a strong indication of a rate hike in June. The greenback rallied against most currency pairs, with the dollar index positing much needed positive gains. 


Greece is set to vote on new reforms to adopt fresh cuts and tax hikes. Naturally, with the country already under austerity measures, the vote was not well received with wide spread protests across Greece. The current vote is all part of an  initiative to boost fiscal reforms and offset borrowings against GDP. This will encourage the IMF  to offer favourable lending terms to allow for much needed debt relief. 

Key Announcements

There are no key announcements today