Investors will be paying attention to US services and manufacturing PMI today

The ECB’s assessment of budgetary challenges faced by the 20 member states shows that the latter are facing a significant fiscal burden from their ageing population, extra defense spending and climate change. ECB’s officials said that the pressure on public finances in the Eurozone would continue to increase in the coming years. As such, it has been estimated that Eurozone countries would have to reduce their budget deficits by about 5% GDP. Furthermore, an extra fiscal effort worth 3% GDP would be needed as from 2024 to cope with ageing population, climate change and higher defense spending. Today, the economic calendar features flash manufacturing and services PMI for France, Germany and the Eurozone. The fibre is currently trading at 1.0718.

Retail sales figures are due for the UK economy today, following the Bank of England’s decision to maintain interest rates at 5.25% in the context of its policy meeting yesterday. The cable was trading at 1.2662 ahead of these figures.

Investors will be paying attention to US services and manufacturing PMI today. Now a contraction of these PMI figures would be read as a?sign of economic contraction supporting the cooling of inflation and hence possibly prompting the Federal Reserve to cut high interest rates. In the context of an event, Richmond Fed president Thomas Barkin, argued in favour of greater clarity about falling inflation prior to cutting rates. Yesterday, data came out red with the Philadelphia Fed manufacturing survey sliding to 1.3 points, only 1.277 million housing starts in May and 1.386 million building permits for the same period. Other construction industry figures are due today, namely, existing home sales.? The greenback was trading at 105.57 at the time of writing.