GBP
Sterling was very much range bound last week, after an abysmal performance in recent weeks. Inflation data last week shows that the worst is not yet over as the UK continues to struggle with the cost of living. Fuel prices and food contributed hugely to the inflation increase, and with further pressure mounting on Prime Minister Boris Johnson and the Bank of England to be more aggressive with interest rate rises to counter the inflationary pressures it will be an interesting week ahead for the currency.
USD
Last week’s services and manufacturing PMIs showed slower growth than anticipated, however the Federal Reserve is currently being seen as one of the major central banks who are aggressively trying to limit the inflationary pressures in the country. The Federal Reserve chair Powell is set to speak alongside his ECB and BoE counterparts at the ECB Forum on central banking. Investors will be keeping a keen eye on this for further rhetoric on the central bank’s stance on their respective economies.
ECB
With the eyes on this week’s ECB forum, positivity returned to the Euro this past week as the European Central Bank is starting to be seen as taking a stronger approach to their monetary policy. From July expectations now include interest rate hikes, as the Union struggles with energy imports because of sanctions made during the Ukraine-Russian war.
World News
According to bondholders Russia has defaulted on foreign debt for the first time in over a century. The payment which was due to be made on Sunday has been missed according to bondholders, with the grace period ending and no interest received. Russia was set to make two payments of £100m and $29m on two euro-denominated bonds, with the Russian finance ministry claiming they have made the payments and fulfilled it’s obligation. Blaming the impact of Western sanctions over its war in Ukraine, Russia did signal last week that it was looking to make the payments in roubles.
Continuing from the end of last week’s positive trend, European stocks moved higher today. Investors are assessing the risks posed by rising inflation and fears of an economic recession, as Central banks around the world are taking steps to combat inflation which has been driven by rising energy and food costs, relating hugely to the war in Ukraine.
Data Releases
| Date | Region | Release | Previous | Consensus |
| Monday 27th June | G7 | Day 2 G7 Meetings | ||
| Tuesday 28th June | G7 | Day 3 G7 Meetings | ||
| Tuesday 28th June | US | CB Consumer Confidence | 106.4 | 100 |
| Wednesday 29th June | EU | ECB Lagarde, BoE Bailey and Fed Powell Speaks | ||
| Friday 1st July | US | ISM Manufacturing PMI | 56.1 | |
Indices
| Share Index | Prev. Close | Open |
| FTSE100 | 7208.81 | 7208.81 |
| DAX | 13118.13 | 13217.9 |
| CAC40 | 5882.65 | 5901.58 |