Sterling’s strength carried over into the new week, as the pound remained within touching distance of its highest against the euro in over a year. GBP/USD is also at its highest for two months, while EUR/USD continued to make slow but steady gains.
The UK bank holiday and Memorial Day over in the US meant the week began in subdued fashion. Things pick up from today, with German inflation the highlight of the afternoon session.
This morning, the German Gfk consumer confidence survey climbed to its highest since April 2022. The reading is still firmly in negative territory (-20.9, to be exact), but respondents reported increased income expectations along with improved economic prospects.
UK political parties are busy plodding along the campaign trail. Rishi Sunak’s Conservatives yesterday wrestled with blowback from bumpy early campaigning, while Labour’s Rachel Reeves used a major speech to say Labour would not look to pass an emergency budget should they win.
Stay tuned over the coming weeks as we provide more information about what the election means for your budget. We’ve got a smorgasbord of content lined up to help guide you through all the uncertainty, so whichever way the votes fall, we’ll show you the dangers of placing your trust in markets and the importance of protecting your budget with us.
Meanwhile, markets are increasing their bets that the European Central Bank (ECB) will cut interest rates at its next meeting on Thursday 6th June. If that comes to pass, the euro could soon be in the firing line, although markets have changed their minds so many times this year it’s almost impossible to keep track.
On the other side of the coin, recent data from Japan has raised hopes that the Bank of Japan may raise interest rate into positive territory. With price dynamics looking more promising, the Japanese yen is up by almost 1% against the US dollar this month, although that could rise higher depending on central bank indications.
US stock markets are on a terrific run, and that could soon be extended. If it feels like every week we report on record highs, there’s an element of truth to that. According to Deutsche Bank, the S&P 500 is on its best run since 1989 and is within reach of setting a joint record going all the way back to 1963.
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