Event risk for June, via Bloomberg
Below are some key event risks to be looking out for in June.
1. ECB rate meeting this week on June 04. There are expectations for an expansion in the Pandemic Emergency Purchase Program (PEPP) with the detail to be scrutinised. According to Pictet's Frederik Ducrozet research note the Governing Council will probably increase the PEPP by €500 to EU1.2trillion and extend the program out until September 2021. There is potential for volatility and a surprise here.
2. EU summit meeting June 19. The euro extended gains last week after the European Commission mobilised €750bln for the European Recovery Fund, increasing it from €500bln. However, euro gains were capped when it became clear how hard it will be to get all 27 member states to agree it. The recovery fund will be discussed at the summit and Merkel has said that she doesn't expect leaders endorsement at the summit and recognises that negotiations wont be easy. The frugal four (Austria, Denmark, Netherlands, and Sweden) will be hard to swing round. However, any consensus here and the EUR will benefit.
3. Brexit - The end of June is the deadline for any extensions to the transition agreement and the backdrop is that both sides are settling in for a hard Brexit. Expect more GBP volatility if no trade deal or extension can be agreed.
4. US Presidential campaign: Although the elections are still 5 months away we can expect campaigns to start getting underway. Arguably they alread have with President Trump increasing tensions with China and targeting social media platforms with an executive order.
