Markets and weather both likely to heat up later this week

Good morning

I hope you had a terrific weekend.  Weather was good, and it looks like we’ll have the same, or warmer, for the coming week.  No time to be stuck inside an office, but my ‘remote working’ hasn’t yet stretched to setting up a a desk outside.  That would be taking things a little too far perhaps.

A great weekend for sport, with the Eubank/Benn fight living up to its hype, although the fact Eubank is still in hospital for checks demonstrates just how gruelling the bout was.  One of the better sporting performances coming from the Spurs stadium this season, that’s for sure.   The London marathon once again produced some super-human performances, the mens race was won in the time of 2 hours, 2 minutes and 37 seconds, a pace that no normal person could keep up with for more than twenty metres or so.  The world record was broken in the women’s race with a time or 2 hours, 15 minutes and 50 seconds, again astonishing.  Congratulations to all participants, really quite an achievement.

In football, Liverpool won the premier title with a 5-1 win over a dismal Spurs team, while Crystal Palace and Man City made it into the FA cup final with wins over Villa and Forest respectively. 

To the markets, where hopes of trade deals to end this tariff standoff continue to help equities with global markets all generally higher Friday and overnight.  Futures prices are a little mixed ahead of this morning European open.  US still seem convinced they are in trade talks with China, while China seem to deny any such discussions. 

The US dollar is a touch higher this morning but still well within the ranges seen late last week, GBPUSD now 1.3300, EURUSD 1.1345, which leaves GBPEUR around 1.1730.   Lots of talk about another ECB 25bps rate cut in June, although ECBs Simkus has said a larger cut could be necessary. 

The Swiss Franc is in focus having pushed above multi-year highs, with USDCHF seeing a low last week around 0.8040, while GBPCHF has dropped from a high at the end of last month near 1.1500 to a low just above 1.0600, although it has since recovered to 1.1045.  Plenty of talk of Swiss rates going negative to slow this CHF appreciation.

Canada goes to polls today in their elections to find a new government.  Mark Carney is favourite but a majority is far from a certainty.  US/Canada trade relationship and Canada’s sovereignty high on the priority list for voters. USDCAD  currently 1.3875, with GBPCAD 1.8455.  Final results should be out by this tomorrow.

Not much else on the agenda today, indeed you’ll see a lack of calendar below, not because I have forgotten but because there is no significant releases due out and Fed officials are in their pre-FOMC blackout period.  Still, the rest of the week makes up for that, with employment numbers, GDP, core PCE and ISM PMI from the US and EU GDP and inflation readings.  Aussie inflation, trade and retail sales will keep our friends down under on their toes.

Otherwise we are looking out for any news of a peace deal in Ukraine.  Trump and Zelensky met in Rome, I have to say that although I’m not really religious I thought their publicised meeting at the Pope’s funeral was a bit disrespectful.  Something behind closed doors would have surely been more appropriate.  Anyway all the talk is really how much ground Ukraine will need to concede to find peace and how much Putin really wants peace.  Even Trump has voiced his displeasure about the ongoing missile strikes by Russia on Ukraine.

That’s about all for now.  Mark’s Leeds play this evening, a win puts them back up at the top of the Championship on goal difference, but their opponents Bristol City have their own place in the play-off positions to fight for.  Could be a good game.  European action this week sees Arsenal in the Champions League semi-final, Spurs and Man Utd in the Europa league semifinals despite their terrible league performances, and Chelsea in their Europa conference league semi-final. 

Have a great day…