Stock markets are in limbo as we await US inflation data and the Federal Reserve monetary-policy decision. However, in the FX markets USD strength is the overriding theme. The EUR has wobbled in reaction to the surprise announcement by French President Macron of a parliamentary election. The question for the EUR is whether this marks the start of a period of sensitivity to regional politics or whether this is a short-lived over-reaction. Away from the headlines, the fiscal situation in France is not pretty. France’s 2023 budget deficit exceeded expectations at 5.3% of GDP and the debt burden is 110% of GDP. In the election process these budgetary difficulties need to be considered and I struggle to favour the EUR over the USD.
Domestically, we have just had the Employment Data, embarrassingly for the government the unemployment rate has ticked up to 4.4%. The focus is still the election promises with the Conservatives releasing their manifesto today, the main question is '2p or not 2p' which is a reference to their potential cut to National Insurance and subsequent headline in one national newspaper saying 'Up the Workers'.
In the Tech world Tim Cook, the Apple CEO, announced a series of generative artificial intelligence products and services on Monday during his keynote speech at the company’s annual developer conference, WWDC, including “Apple Intelligence” and a deal with ChatGPT-maker OpenAI.
Data points include OPEC's Monthly Market Report which is released at 1pm, Canadian Building Permits and speeches from the ECB's Lane and Elderson.
