UK chancellor Jeremy Hunt and Brussels’ financial services commissioner, Mairead McGuinness, signed a Memorandum of Understanding on financial services yesterday outlining plans for UK/EU cooperation.
Hunt said it was “an important turning point” that would help support the UK and London’s role as a hub of financial services around the world.
In the wake of said agreement, the pound made marginal gains against the US dollar and euro yesterday.
This morning, the German consumer morale unexpectedly declined to -25.4 heading into July, falling short of expectations of -23.0. This decline was the first in nine months, primarily driven by a decline in economic and income expectations.
At the European Central Bank’s (ECB’s) annual forum in Sintra, Portugal yesterday, president Christine Lagarde said, “Inflation in the Euro area is too high and is set to remain so for too long.” This comes as wage growth is pressuring inflation. As a result, the ECB needs to bring interest rates down but as Lagarde said, it’s unlikely this will be in the near future.
In the UK, the largest mobile and broadband companies have been accused of fuelling “greedflation” after a Guardian report revealed that six companies controlling the telecom sector all charged a 3.9% supplement on top of their annual inflation-linked increases this year.
Durable goods orders in the US jumped 1.7% month-over-month in May, outperforming the forecasted 1% decline. This marks the third consecutive month of rising durable goods orders, led by a 3.9% surge in transportation equipment.
Figures on new home sales in the US rose to the highest in over a year yesterday, jumping 12.2% month-on-month to a seasonally annualized rate of 763,000 in May. This significantly outperformed expectations of 675,000.
In France, May unemployment figures rose by 6.2 thousand to 2.806 million from the previous month, moving further away from the year-low seen in March.
The Canadian inflation rate fell to 3.4% in May from 4.4% just a month prior. This represents the lowest rate since June last year and was in line with market expectations.
Things to listen out for later today include Italian inflation, which is expected to fall from 7.6% in May to 6.7%, and ongoing speeches from Christine Lagarde, plus, another from Federal Reserve chair, Jerome Powell this afternoon.
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