- Boris Johnson & EU leaders set a July deadline for a Brexit trade deal boosting Pound (GBP)
- UK unemployment expected to tick higher to 4.6%, still low thanks to government furlough scheme
- Euro looks ahead to ZEW sentiment data which is expected to show a continued improvement
- At 05:15 UTC, GBP/EUR trades +0.1% at €1.1170
After spending much of the previous session in the red, the Pound rallied into the close, settling in positive territory +0.1% at €1.1131.
At 05:15 UTC the Pound is extending those gains +0.4% at €1.1170 on Brexit optimism and investors look ahead to UK unemployment figures and Eurozone ZEW sentiment data.
Today sees the first of this week’s big data releases, the ILO unemployment data and May jobless claims. The data is unlikely to show the big losses and gains that the US labour market has been releasing thanks mainly to the UK government’s furlough scheme.
The furlough scheme is expected to keep jobless claims figures under control for now. However, there is a good chance that the labour market will become more strained in the coming weeks and months and the scheme draws to a close.
The unemployment rate is expected to show the 856,000 jobless claims in April, which is expected to push the unemployment rate to 4.6% after several months a multi-year lows of 3.9%.
Brexit remains very much in the picture for sterling investors. A high level meeting on Monday between political leaders saw Boris Johnson setting a July deadline for agreeing a deal This has prompted speculation that an EU – UK post Brexit trade deal could still be achievable as political momentum is injected into the talks.
The Euro traded mixed versus its major peers on Monday, supported by a U-turn in risk sentiment following an announcement by the US Federal Reserve that it will buy corporate bonds as part of the QE programme and that President Trump is considering an additional $1 trillion stimulus package
Today investors will look ahead to the release of ZEW sentiment data. Analysts are expecting sentiment to continue improving as economies across the region continue easing lockdown measures and reopen.
