23/06/2020

UK factories suffer worst quarter on record


GBP

Sterling had a mixed day yesterday as it was aided by hopes of a Brexit trade deal and expectations of better economic data due to a relaxation in lockdown measures. However, British industrial output recorded its biggest quarterly fall on record during the three months to June and this stopped the pound from having a strong day of gains.

Brexit positivity had risen in the last few days, largely in part to comments made by the French president Emmanuel Macron during his visit to the UK. He mentioned that France supported reaching a deal and this was followed by EU chief Ursula von der Leyen stressing that they had a “willingness to undertake all possible efforts to come to an agreement”.

USD

US Key Trade Advisor Peter Navarro made comments yesterday that the trade deal with China is “over”. As a result, the riskier basket of currencies fell against the safe-haven dollar, with investors fearing that this is a sign that the already tense relations between the US and China may now depreciate further and this will adversely impact global supply chains.

Key announcements

09:00- EUR- Markit PMI Composite (Jun); expected to increase to 42.4 from previous 31.9
09:30- GBP- Markit Services PMI (Jun); expected to increase to 40 from previous 29
09:45- GBP- BOE Governor Bailey Speech


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