Does Comey have a smoking gun?
US JOLTS job openings rose to 6.04m for April from a revised 5.79mn previously; the strongest reading for over 20 years, maintaining confidence in the labour market. The Dollar was unable to gain any traction from the data with the currency still undermined by a revision to Federal Reserve policy expectations following last week’s weaker than expected employment report.
This afternoon, Jamey Comey testifies to Congress in what could become the beginning of the end for the Trump Administration. US markets especially will be glued to the broadcast and volatility will be high.
Narrow Sterling ranges prevailed on Tuesday with a reluctance to make a commitment to aggressive trades ahead of key event risks later in the week. The slightly more defensive tone surrounding risk appetite had a negative impact on the UK currency, but there was support just below the 1.2900 level against the Dollar while the Euro advanced slightly to 1.1455.
A late recovery in oil prices also provided some net currency support with net UK support on valuation grounds. All investors will be looking ahead to Thursday’s election result; unsurprisingly there was further divergence between polls which maintained a high degree of uncertainty whether the Conservative Party could secure a comfortable working majority. The polls have suggested anything from a hung parliament to an overwhelming Tory majority, although, they have been wrong before.
According to the latest UK poll via Opinium, Conservatives are leading with 43%, while Labour stands at 36%. The Opinium poll was conducted between the 4th and 6th of June. The final polls will continue to be monitored on Wednesday for any evidence of a late shift in support and there will be the risk of choppy trading conditions during the next 24 hours.
Overall confidence in the Eurozone economic outlook remained firm yesterday, allowing net support for the Euro. The Eurozone Sentix investor confidence index came in at 28.4 for June, up from 27.4 the previous month and above consensus expectations, giving the highest reading since July 2007. Retail sales, however, read a 0.1% increase for May from the 0.2% the previous month.
Thursday’s European Central Bank meeting may not see any changes to monetary policy, but the Governing Council has the potential to signal that normalisation of this policy is on the way.
Data to Watch:
8:00pm USD Consumer Credit change (Apr)