Yet again the main currency pairs are not doing an awful lot, with the euro still hovering just above the $1.1250 level against the dollar and the pound continuing to trade at just over 86p against the single currency ahead of today’s EU leaders summit. Elsewhere, equity markets lost ground yesterday with both European and US stocks closing lower, while core bond yields edged down again and are nudging lower this morning as well
Regarding the summit of EU leaders, the Council president, Donald Tusk, has said “our experience so far, as well as the deep divisions within the House of Commons, give us little reason to believe that the ratification process can be completed by the end of June”. Hence, while Prime Minister May has requested an extension of Article 50 to the 30th of June, Tusk believes “we should…discuss an alternative, longer extension. One possibility would be a flexible extension, which would last only as long as necessary and no longer than one year…the flexibility would allow to terminate the extension automatically, as soon as both sides have ratified the Withdrawal Agreement”.
The IMF expects global GDP growth of 3.3% this year according to its latest projections, revised down from 3.5% in its January forecasts, picking up to 3.6% in 2020 (which is unchanged from January)
The ECB meets today, but having adjusted its policy stance last month (to say interest rates are expected to remain unchanged through to the end of 2019) it is likely to stand pat on this occasion. Also scheduled for today are the minutes of the recent Fed meeting, at which the central bank signalled rates could remain on hold this year having previously indicated that 2 further hikes were likely
On the date front, UK GDP and CPI inflation in the US are both due for release