Market Comment - 26th May 2021

Posted by Stuart PritchardMay 26, 2021

Good morning,

There has been a confusion with the government’s advice that was set out over the last few days in regards to the eight areas in the UK that have been hit hard with the Indian Covid-19 variant. Ministers have backtracked over the travel advice, after a change in guidance led to a massive confusion. The advice is now that people should minimise travel in and out of Bolton, Blackburn, Kirklees, Bedford, Burnley, Leicester, Hounslow and North Tyneside.

US business groups have joined up to form a coalition opposing tax increase proposals by the Biden administration. The coalition has been established because President Biden is seeking to pass a $2.3tn (£1.7tn) infrastructure package, this would direct billions to initiatives such as charging stations for electric vehicles and eliminating lead water pipes.

In regards to the currency markets, the major pairs continued to trade within a narrow range as they have done for the last couple days. Sterling held a partially softer tone yesterday; the euro remained in a position where it was holding a slightly firmer tone against the dollar.

The German Ifo for May ended up coming in ahead of the predictions and has reached a 2-year high. In addition to this, the other key data release for yesterday was the Conference Board measure of US consumer confidence for May; the data from this did not meet expectations.

The opening trading for this morning is still very uneventful; EUR/GBP is at a similar mark to yesterday. EUR/USD is also at a similar position to what it was yesterday, with the euro slightly gaining against the dollar. GBP/USD has come down slightly to what it was yesterday.

For the day ahead, there isn’t much happening in regards to the macro calendar; for the currency markets you can expect them to trade within narrow ranges again today.

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Todays Economic Calendar 

Todays Economic Calendar 

Wed 26th FRA: 07:45 INSEE Business Climate (May)

FRA: 07:45 Consumer Confidence (May)

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