Swiss Inflation has risen by 0.6% last month, compared to a year earlier. Crucially this matched April’s increase but came in below the projected 0.8% increase. Petrol products cost nearly 18% more, with these increases linked to The Middle Eastern conflict. On a monthly basis, consumer prices across the board increased by 0.2% – contributed by higher costs for Petrol, Car Rentals and Vegetables.
Elsewhere this morning we have Retail Sales for Europe with expectations showing a yearly drop of just under 1% which would be fairly damaging as Europe still grapple with elevated price rises. A poor retail sales outcome would reflect consumers tightening their belts, and that in itself creates a problem for The European Central Bank because hiking interest rates would potentially worsen the scenario.
Turning our attention to The Middle East, Donald Trump expressed some optimism over an imminent deal in Iran to try and offset continued military escalations across the region. Trump believes the U.S can recover Iran’s enriched Uranium in the not-too-distant future and that negotiations were performing very well, with a possibility of a deal this weekend.
Market reaction has seen continued US Dollar strength, as the merry-go-round of contrasting comments and actions take place. If the uncertainty continues then we can expect the Dollar to keep gaining strength against its currency peers.
GBP/EUR 1.1554 GBP/USD 1.3417 GBP/AED 4.9312
GBP/AUD 1.8829 GBP/CHF 1.0614 GBP/CAD 1.8676
GBP/NZD 2.2887 EUR/USD 1.1597 GBP/ZAR 21.8489