It is a big day
tomorrow in the Eurozone where it is widely expected interest rates will be cut
and a stimulus package will be introduced By the European Central Bank to ward
of the threat of deflation.

We have seen safe haven
flows the the USD over the last week and if these policies are introduced by
the ECB tomorrow we could see further USD strength. If you would like to
discuss this further please do not hesitate to contact your dealer.

It is a big day
tomorrow in the Eurozone where it is widely expected interest rates will be cut
and a stimulus package will be introduced By the European Central Bank to ward
of the threat of deflation.

We have seen safe haven
flows the the USD over the last week and if these policies are introduced by
the ECB tomorrow we could see further USD strength. If you would like to
discuss this further please do not hesitate to contact your dealer.

EUR:
Unemployment in the Eurozone improved from 11.8% to 11.7% in April, while the
wider measures across the European Union fell to 10.4% from 10.5%.With the
lowest unemployment rates that were recorded in Austria (4.9%), Germany (5.2%)
and the highest was recorded in Greece (26.5% and Spain (25.1%).
 
The number of people registered as out of work in Spain fell by 111,916
people last month the biggest fall for a May on record. This is a good sign the
Spanish economy is recovering but this figure does not include the long term
unemployed.
 
Inflation across the Eurozone also slumped to just 0.5% in May, from 0.7% in
April.food, tobacco and alcohol inflation fell sharply in May – down to just
0.1% in May compared to 0.7% in April there was also no inflation at all in
non-energy industrial goods
 
This figure makes it more likely that the European Central Bank will act on
Thursday by either cutting interest rates or introducing a negative deposit
rate for banks.

GBP:
House prices in the UK have broken through their previous high and the average
cost of a home is now higher than ever before.Nationwide reported a 13th
consecutive month of house prices, bring the cost of an average UK home to
£186,512.

This figure is higher than the previous peak reached in October 2007.However at
0.7% increase in May the monthly rate of inflation reported by Nationwide was
lower than the 1.2% recorded in April
 
Britain’s construction sector fell to its slowest level in seven months in May,
as builders experience bottlenecks and supply shortages. But at 60.0, the UK
construction PMI still showed solid growth and is positive for the UK economy.
 
Today:
We have PMI Services figures across a number of countries in the Eurozone as
well as the UK. Q1 GDP is also set to be released in Europe and is
expected to remain unchanged at 0.2%
 
Key Announcements:
09:30 – GBP – PMI Services (May) expected to be slightly lower at 58.2
10:00 – EUR – Q1 Eurozone GDP expected stay flat at 0.2%
13:30 – USD – Trade balance for April expected to be slightly higher deficit of
40.80 Billion

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