Deal or No Deal?
The Pound had a very relaxed transit through yesterday’s trading, easing higher against both the US Dollar and the Euro without being very erratic. With only a handful of impactful trading data sets released, the principal exchanges unfolded without drama. The Australian and New Zealand Dollars, however, have retreated rapidly against the Pound with the Kiwi Dollar being at its lowest cross since 2011 after the Reserve Bank of New Zealand cut their interest rates.
US Retail Sales was a strong figure for them, with a huge improvement over the last numbers they produced, and this even confidently beat expectations. However, this didn’t have a big effect on the strength of their currency. We also had Initial Jobless Claims from the States too, which measure the change in the number of people who fill in claims for state unemployment insurance. This figure was ever so slightly higher (so negative) but not enough to be too concerned.
After the recent walking away from negotiations by the International Monetary Fund in Brussels due to major differences, it would seem that there could be a deal for Greece to be finalised on June 18th. The Greek leadership had more recently been criticised and told to stop ‘gambling’ with it’s future. The IMF delegation had actually left on a plane from the negotiations because the differences meant they could not thrash out a deal. So the turnaround in events seems very fast and I will certainly be watching with a keen eye to see whether this is still more fractured politics from the Greeks where within days, conflicting messages from the same cabinet are provided.
Today is another slow news day as far as economic releases are concerned. We are expecting shortly the Eurozone Industrial Production figure, which is forecast to be flat month on month and a reduction year on year. Then we will look to the US Producer Price Index, for some more clarity on price pressures. Overall, my expectations are for another day devoid of too much volatility.