By Enrique Diaz-Alvarez, Chief Financial Risk Officer of International Payment Company Ebury

The main coins generally closed a week very close to the levels they had begun, as the accumulation of duties on duties largely offset the first indications of the US economy after the “liberation day”.

The Trump’s judicial defeats and the stabilization of US government bonds After a few difficult weeks supported the dollar, but the early signs of deceleration of the economy due to duties moved in the opposite direction, and the end result was a week of negotiation. Most of the emerging market coins fell against the dollar, though the moves were relatively mild everywhere.

This week is full of important financial data and monetary policy announcements. We start with the inflation her Eurozone For May on Tuesday, we continue with ECB’s interest rate decision on Thursday, and we close the week with the long -awaited report for the US labor market, which will confirm or deny (very early) deceleration signs that appear in employment data. There are no US government bond auctions this week, so the attention will be temporarily shifted from the bond market to financial data.

Sterling

A great upward surprise Effects for April retail sales in the United Kingdom comes to add to the shock of previous week’s inflation and reinforces the feeling that the Bank of England will not rush to reduce interest rates soon. Therefore, the highest interest rates in G10 (along with the US) will be an important positive factor for the pound in the coming months. In addition, the prospects for the UK trade are relatively good after reaching an agreement with the US and relaxing trade with the EU. In our opinion, the pound is perhaps the coin of the G10 with the greatest potential for appreciation.

Euro

The ECB is expected to reduce interest rates by 25 basis points at Thursday’s meetinghowever, this is fully expected by the markets and is not expected to have a particular effect. The statements of the Board of Directors are expected. In particular, we are waiting to find out his interpretation of the recent mixed elements, where research continues to present a gloomy image, but the facts seem to be better able to withstand. Inflation data in May will be published just two days before the meeting. Markets expect that April’s upward surprise will be completely overthrown, and expectations for further interest rate cuts after this week are based on this case. Thus, this particular element becomes additional – perhaps even greater than the ECB meeting itself.

US dollar

Last week, tranquility in the US bond market returned and the dollar stabilized. However, the earlier correlation between higher yields in the US and dollar reversal has been reversed, a worrying development for the US currency. The first signs of deterioration of the labor market appeared in the form of slightly increased weekly applications for unemployment benefits. The first quarter data for GDP also showed a slowdown in US consumption, which, according to the PCC pricing price report (PCE), continued in April. Expectations for this week’s figures are for a mild slowdown, but not something that would lead the Fed to cut interest rates soon.