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Midday Brief
The single currency has received a boost alongside the German DAX this morning after the June IFO survey showed that sentiment amongst German manufacturers improved to a three high.
All three components of the closely watched German IFO survey showed improvement. The IFO Business Climate indicator rose by 2.6 percent from a month earlier, hitting 101.8. This was the highest number since November 2018.
The Current business indictor came in much better with a 99.6 reading. Very importantly the Expectations of the IFO survey continues to rise and came in at 104.00, which was a gradual improvement from last months 103.9 number.
Generally speaking, rising business expectations is a sign that business owner believe that economic activity will remain robust in the short to medium-term. This is one of the reasons why the euro and Ger30 has risen today.
The Bank of England interest rate decision has come and gone, with the central bank leaving rates and asset purchases unchanged as widely expected by the market. The main takeaway so far from the June meeting is that uncertainty persists towards the economy and the jobs market.
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Sterling has taken a dip on the back of the Bank of England policy decision, while the ActivTrader Market Sentiment tool shows that traders are broadly mixed towards the pair’s future path. The FTSE100 has received a boost on the back of QE remaining in place, and also its inverse relationship with sterling.
Traders are investors are braced for an extremely busy US trading session today as the United States economy releases a raft of top-tier data including GDP, Growth, Trade, and Weekly Jobs figures. Markets are also acutely aware that a number of FED members are speaking today, with FED member Williams speech is likely to be the key attraction in terms what could potentially move the market.
FED member Willians is known to have a neutral bias towards taper and rates, while Bullard, Kaplan, Harker, and Bostic are hawks. If Williams sounds more bullish today it could be a notable market mover.
