UK
Governor Mark Carney stated last night that the first rate rise could happen
sooner than markets currently expect. As a result the pound jumped up
significantly against all of its major trading partners.

He also said the UK economy is currently unbalanced internally and
externally.Internally, there is wasteful spare capacity concentrated in the
labour market. The Monetary Policy Committee (MPC) currently estimates this gap

UK
Governor Mark Carney stated last night that the first rate rise could happen
sooner than markets currently expect. As a result the pound jumped up
significantly against all of its major trading partners.

He also said the UK economy is currently unbalanced internally and
externally.Internally, there is wasteful spare capacity concentrated in the
labour market. The Monetary Policy Committee (MPC) currently estimates this gap
to be around 1-1.5% of GDP, though we caution against false precision as there
are wide confidence bands around this central view.

But Carney says he wants to be clear that that Bank’s Monetary Policy Committee
has “no pre-set course” as It all depends on the economic
data. Mark Carney also touched on the UK housing market and the risks posed
by the recent sharp increase in prices.

USD
US retail sales rose by just 0.3% in May, just half as much as expected. But
April’s initial reading of 0.1% has been revised up to a healthier-looking
0.5%. Also the number of Americans filing new claims for jobless benefit
rose a little last week, to 317,000 from 313,000 the previous week.

This helped to give the dollar some support in the afternoon trading session.

Key Announcements:
10:00 – EUR –  Eurozone Employment change Q1 – Expected to stay the same at
0.1% 
10:00 – EUR – April Eurozone Trade balance – Expected to rise
 to 15.9B from 15.2B Surplus
13:30 – USD –  May Producer Price Index – Expected to come in higher
at 2.4% from 2.1%

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