This week’s only just begun.
Despite summer trading conditions very much taking hold of markets, there has been sufficient data and enough market-sensitive headlines to move some spot FX markets. For example, the data observing the German labour market this week provided sufficient doubt to question some of the Euro’s recent declines and relieve some fears of widespread European economic decline. However, the real action is certainly still in store for later this week.
We kick off with the Bank of England this afternoon who will release its latest monetary policy decision. Despite 25-basis points remaining the base case and that most visibly priced within markets, there are still visible expectations of a 50-basis point hike within market pricing. Despite the full ‘double hike’ not being reflected within the SONIA curve, pricing as of market open this morning is sufficiently advanced to conclude there should be a shift in GBP spot and shorter dated forward prices whatever the outcome at midday today. If the BoE repeats is bumper June 50-basis point hike, we can expect some GBP strength at least whilst market digest the prose accompanying the decision.
The BoE decision today will not be the last important release for the week or even day. 3pm BST sees ISM services data released which has shown an ability to command the direction of USD trading in recent months. This data will act as a prelude to tomorrow’s USD-sensitive non-farm payroll data which will be observed closely as markets assess the path ahead for the Federal Reserve. The data could help inform whether the stop-start learner driver inspired rate late-cycle hiking programme is all over or another jerk forward is in order.
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – Fujairah
Humphrey Percy
Fri 22 May 2026
Fujairah For those readers who are less familiar with the Emirate states that make up the UAE, Fujairah, and Ras Al Khaimah are the less glamorous relations of Dubai and Abu Dhabi with low-cost housing, largely immigrant labour accommodation and heavy industry rather than swanky lifestyle and up market shopping malls. With the new oil […]
Daily Brief – Mariannes
Humphrey Percy
Wed 27 May 2026
Mariannes In addition to gold coins such as South African Krugerrands, Canadian Maple Leafs, and American Gold Eagles, from June 16 you will once again be able to buy French Mariannes. The last time France minted gold coins was mostly in the Napoleonic era and appropriately they were called Napoleons and were issued between 1803 […]
Daily Brief – EU capital markets
Humphrey Percy
Mon 1 Jun 2026
EU capital markets As we have written before, for the EUR to become a global reserve currency requires a number of pre-conditions which largely stem from the establishment of an integrated EU Capital Market. Brussels is accused of dragging its feet if not actually being obstructive so the 6 largest countries have banded together to […]
