Weekly Market Report

The US Dollar saw some strength as Friday’s US jobs report for May showed that 172,000 jobs were added, well above forecasted figures. In addition, Israel and Iran have carried out air strikes against each other for the first time since the ceasefire came into affect 2 months ago which has also further given the Dollar support due to it’s safe-haven status.

The ECB interest rate decision is due on Thursday, markets are currently predicting a 25 basis point increase. The more important question is whether the ECB signal a pause after this increase or opens the door to a July follow-up rate hike. A hawkish June hike along with forward guidance pointing towards further action in July could give the Euro some renewed support.

Andy Burham has confirmed his intention to challenge PM Starmer, contingent on him winning the Makerfield by-election on 18th June (the same day of the Bank of England interest rate decision) – Sterling could see particular volatility in the run up. 

What this may mean for businesses

The ECB interest rate decision on Thursday will be closely watched. Businesses making Euro payments in June and July should let us know so we can monitor rates.

Businesses should be aware of 17th June UK May CPI data and 18th June Bank of England interest rate decision along with the Makerfield by-election – concentration risk remains high.

Trumps pressure on Fed Chairman Warsh is being closely watched. The June 17th press conference is the moment the markets are waiting. Any language suggesting shifts in the Fed’s communication style or inflation framework could create volatility.

Businesses that have been waiting to see what happens wit the rates are approaching a period that is likely to be volatile. Reviewing upcoming payment requirements before the ECB meeting on Thursday could be sensible.

We are seeing lots of businesses secure forward contracts especially on GBP to EUR, and an increase in demand for market orders/stop loss orders across the board.