Straw polls cause collywobbles
Sterling fell to an eight-week low against the Dollar over the weekend as investors grew more nervous over the EU referendum later this month. Aside from the referendum, there are important data releases due this week which could impact the Pound. The Consumer Price Index (CPI) for May is due out tomorrow, followed by labour market figures on Wednesday and Retail Sales and the Bank of England’s Monetary Policy Committee meeting on Thursday.
The Pound hovers around the 1.4200 level against the Greenback this morning due to a massive Sterling sell off in response to a new poll showing a large lead for the “Leave” campaign. However, it is worth noting that the poll was commissioned by the Brexit-backing Bruges Group think tank. Similarly, the Sterling sell off was evident against the Euro, as the pair opens around the 1.2600 level this morning, a fall of 1.5% from Friday’s open.
Friday’s German Wholesale Price Index for May came in at 0.9%, beating a consensus of 0.2%. The German Consumer Price Index and Harmonised Index of Consumer Prices data matched expectations of 0.3% and 0.4% respectively. All of this provided a boost for the single currency. There is no Eurozone data today.
In the US, there were no tier one data releases on Friday. The Federal Budget Balance did come in better than expected, however, showing a deficit of -53B against the market consensus of -60B. The Michigan Consumer sentiment also came in slightly better than predicted.
Data to watch: 8am German Buba President Weidmann Speech. 2.30pm UK May CB Leading Economic Index.