The weekend has certainly been an active one with the outcome of the UK’s General Election and news of a financial rescue package worth up to $1 trillion being agreed by policymakers and the IMF dominating headlines.


The pound suffered heavy losses in Friday morning’s session as the vote count from the previous day’s General Election confirmed the UK would be heading to its first hung parliament in 36 years. The election results completely overshadowed improved PPI data which showed a rise in April. However, sterling had stabilised by the afternoon session as markets digested the result and reacted positively to the news that the largest party, the Conservatives, would seek to form a coalition government with the Liberal Democrats, the UK’s third largest party.


The euro found support over the weekend as central bank policymakers, the EU and the IMF alongside central banks the world over agreed to a mammoth $1 trillion aid package designed to provide a degree of stability to the financial markets which have seen incredible turbulence in recent weeks. Although the initial announcement has succeeded in calming markets as the sheer size of the agreement is digested by markets, a lack of clarity as to exactly how the aid is to be used and for what could ultimately threaten to undermine its positive effects.


In the US, the eagerly awaited non farm payrolls report was released in Friday’s afternoon session. Until then the US dollar had surged over 12 month highs against both the sterling and the euro as election jitters and debt concerns in Euro Zone combined to cause a wave of safe haven inflows. The rush to dollar positions calmed when official figures revealed that the US saw 90,000 more jobs created in April than expected.


Today markets will look to the UK’s Bank of England as it announces this month’s interest rate decision as well as any further news on a potential Conservative/ Liberal Democrat coalition government. The Euro Zone sees trade data from Germany and industrial output from France and Italy. There is no data of note due from the US but any comments on the $1 trillion aid package from any quarter will be keenly analysed.


• United Kingdom
Bank of England Interest Rate Decision (May)

• United States
Employment Trends (Apr)

• Euro Zone
EU Sentix Survey (May)
Germany – Import/ Exports (Mar)
Germany – Trade Balance (Mar)
France – Industrial Output (Mar)
Italy – Industrial Output (Mar)