Main currencies steady

The main currency pairs are steady this morning with the euro and sterling continuing to trade at around $1.12 and $1.24 against the dollar respectively, leaving the single currency-pound rate still sitting just above 90p. Equity markets reversed some but not all of Wednesday’s fall, amid continuing reports of a notable increase in COVID-19 cases in some areas, while core bond yields ended little changed on the day

The minutes of the ECB’s meeting earlier this month published yesterday note that “overall, the incoming data pointed to a further significant contraction of real GDP in the second quarter (and) while euro area activity was expected to rebound in the third quarter as the containment measures were eased further, the overall speed and scale of the rebound remained highly uncertain”

The EU’s Michel Barnier says  a post-Brexit deal with the UK is “still possible”, adding that the EU is “ready to work on landing zones” in relation to contentious areas e.g, level playing field, fishing

The US economy contracted by 1.3% in the first quarter of this year according to the third and final estimate of GDP published yesterday, with the latest “guesstimates” pointing to a much larger contraction of more than 10% in the second quarter, while the number of new jobless claimants continued to rise last week although the increase of just under 1.5m was the smallest since the crisis began

Data due today includes consumer spending and annual PCE inflation in the US, with the former expected to have bounced in May after a sharp fall in April and the latter expected to have held steady at 0.5% last month