E.U. reaches Migration Deal

Daily Analysis - 29/06/2018

Risk sentiment rises; euro jumps as E.U. leaders agree on Migration Package

The euro gained half a cent soon after news broke in early hours of the morning that leaders at the E.U. Summit taking place in Brussels, managed to negotiate a deal to stem the flow of migrants into the E.U.

Can euro maintain gains?

By 4:30 am Brussels time, member states wrapped up an agreement on measures that would set up holding centers to handle asylum seekers speed up the process of determining whether people have the right to asylum and expelling those who don’t. They also agreed on increasing border security. The euro jumped as the deal showed unity within the bloc, which had been seeing a rift lately, especially caused by Italy, which was making strong demands. The E.U. Summit contuse into a second day today. Meanwhile, Eurozone CPI data will be eyed later. It remains to be seen how long the euro’s short covering bounce will last. The EURUSD is currently trading above $1.16.

WTI oil breaks above $73 a barrel

Crude oil broke another key level and has risen above $73 a barrel. There is still a lot of concern about supply shortage and will Saudi Arabia be able to offset the loss of Iran oil supply as a result of the sanctions and after the U.S. this week announced it wants to see an end of oil buying from Iran by November.

U.K. GDP in focus

The British pound will be in focus today as key data will be released. The final estimate of Q1 GDP is expected to show the UK economy grew 0.1% over the months of January to March, the same as the previous estimate. The annualized reading is also expected to remain steady at 1.2% in Q1. GBPUSD is currently trading above the key $1.31 level and today’s data could determine whether this level can hold.