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Pound hit by polls, euro-area inflation slows more than expected, and China growth is robust despite the deleveraging campaign. Here are some of the things people in markets are talking about today.
The pound fell to the lowest level in more than five weeks after a projection by Yougov Plc, a U.K. polling company, showed that Theresa May's Conservative Party may fall short of winning a majority in Parliament in the June 8 election. The projection, which is based on a new methodology, is out of step with other polls that continue to show a solid Conservative lead. It does, however, have people more seriously addressing the question of what it would take for Labour's Jeremy Corbyn to win the election.
Euro-area inflation slowed to 1.4 percent in May, slightly below economist expectations, and the weakest reading this year. Core inflation dropped to 0.9 percent. The numbers are likely to aid ECB President Mario Draghi's call for continued accommodative monetary policy ahead of next week's governing council meeting. Meanwhile, unemployment data for the common-currency zone showed a drop to 9.3 percent, the lowest level since March 2009.
No China slowdown
Official manufacturing data released overnight showed that growth in China is holding up, despite worries that a leverage crackdown would feed through to investment in the world's second-largest economy. The Shanghai Composite Index rose 0.2 percent, paring its monthly loss to 1.2 percent. One place that the deleveraging campaign is apparent, however, is in the government bond market, with the nation's 10-year security falling for the second month in a row.
Overnight, the MSCI Asia Pacific Index was little changed, while Japan's Topix index slipped 0.3 percent with energy companies leading the losses. In Europe, the Stoxx 600 Index was unchanged at 5:48 a.m. Eastern Time, with London's FTSE 100 Index gaining on the back of the drop in the pound. S&P 500 futures were also unchanged.
It is a fairly light day for U.S. data today, with Chicago PMI due at 9:45 a.m. and pending home sales at 10:00 a.m. It will be worth keeping an eye on Brazil, where the central bank is expected to cut the main Selic rate by 100 basis points. Also due today is a European Commission report into the future of the monetary union, which may suggest the need to issue collective bonds.
What we've been reading
This is what's caught our eye over the last 24 hours.
- This is what the demise of oil looks like.
- The world could enter a climate 'danger zone' if Trump exits Paris deal.
- The Trump trade's so dead you may as well buy it, says Citigroup.
- North Korea has more friends than you think.
- Larry Fink says Europe has a brighter economic outlook than U.S.
- The sixth-best soccer team in England is the world's richest.
- Five reasons people are still skeptical about Bitcoin.