The euro surged yesterday after the ECB ramped up its coronavirus response by agreeing to inject an additional €600bn (£539.5bn) of emergency financial support into the Eurozone economy.
It’s meant that the currency has dominated peers including the pound, which is at its lowest level in over two months against the euro.
The pound has performed better against the greenback, with dollar weakness helping push the sterling to near three-month highs.
European shares bounce back from Thursday’s drop
After ending Thursday’s session in the red (which analysts have chalked up to profit taking) European shares are back in positive territory this morning:
- FTSE 100 is up 0.6%
- France’s CAC 40 is up 1%
- Germany’s XETRA DAX is up 1.1%
- Spain’s IBEX is up 1.4%
Introduction: Consumer confidence hits decade low
Good morning and welcome to our rolling coverage of the world economy, the financial markets and business.
Consumer confidence took a dive in May to the lowest level since the global financial crisis.
That’s according to the latest GfK consumer confidence index, which fell to -36 in second half of the month, amid worries over a surge in unemployment and tumbling house prices during the Covid-19 lockdown.
(We’ll get an update on house prices when Halifax releases their data at 8:30am)
That GfK reading was the lowest since the banking crash in January 2009, and is close to record lows of -39 recorded in July 2008.
However, the release is not expected to dampen overall sentiment on equity markets, with the FTSE 100 and its European peers all set to rise when markets open at 8am.
And all eyes will turn to US non-farm payrolls for May this afternoon. As jobless numbers continue to mount during the pandemic, we’re expecting to see the US unemployment rate edge closer to 20%.
Michael Hewson, chief market analyst at CMC Markets UK, says:
With certain sections of the US economy slowly reopening, there is a hope that we could start to see the unemployment rate start to plateau as more and more people return to work after being furloughed.
- 8:30am BST: Halifax house price index for May
- 13:30pm BST: US non-farm payrolls and unemployment rate for May