ollowing a number of weeks of division and protectionist rhetoric, an agreement was reached that will include the setting up of migrant centres in EU countries on a ‘voluntary basis’. Crucially, this will also include measures to alleviate pressure on those countries that feel overwhelmed, including Italy, which threatened to veto the conclusions of talks should the country not receive adequate support from the EU.

The main economic data release among the major economies today will undoubtedly be this morning’s Eurozone inflation numbers. Following the European Central Bank’s last meeting earlier this month, in which Mario Draghi emphasised that interest rate hikes in the currency bloc would only be considered should inflation return to target, we think that upcoming CPI releases will take on added importance. Of note, will be the strength of the core inflation number, given that it has failed to exceed even the 1.1% level every month for almost a year.

Sterling range bound ahead of UK GDP numbers

Sterling rose modestly against the US Dollar this morning, in line with the rally in the Euro, albeit to a lesser degree. The Pound spent much of the London session fairly range bound against both the Euro and the US Dollar, with investors awaiting any sort of clues on the data front that would give an indication as to the likelihood of an interest rate hike from the Bank of England, in August.

This morning’s UK GDP numbers are expected to remain unrevised and confirm that the economy expanded by just 0.1% in the first quarter of the year. Barring any surprises here, the Pound is likely to be driven mainly by underlying sentiment towards the Brexit negotiations, or trade war concerns.

US growth revised lower, but signs good for second quarter

Revised first quarter growth data out of the US on Thursday failed to meet expectations, although continued to point to a solid economic performance in the country that should allow the Federal Reserve to continue raising interest rates on a gradual basis. Economic growth for the first three months of the year was revised down to a still fairly healthy 2.0% annualised. This was down primarily to the weakest performance in consumer spending in five years, although this should pick up steam in the second quarter, once Donald Trump’s tax stimulus kicks in.