Theresa May heads to Brussels today in order to set out the principles of her government’s plan on how it will handle the future rights of the 3 million EU citizens that live currently in the UK. May is going to meet the rest of the EU leaders for the first time since the UK’s parliamentary elections. Whitehall officials said, some days ago, that May will make a “big, generous offer” because she wants to have a positive start in the Brexit negotiations. However, a Bloomberg report says that her plan won’t be that attractive or generous to EU leaders.

The Brent crude oil price per barrel dropped below $45, spreading fears among traders over a global supply glut and a falling demand. The price is the worst recorded since last November. Energy stocks slid on Wall Street and the trend continued today in the morning in Europe, with every major European stock market index dipping.

Pound Sterling – UK Markets

Today, Sterling lost minor ground against the US Dollar with the exchange rate set at $1.26. The British Pound retained its value against the Euro, trading at €1.13. Theresa May will be in Brussels today to participate in her first European Council summit since the UK’s parliamentary elections.

May is expected to set out the principles which will shape her government’s negotiating stance regarding the rights of European Union (EU) citizens living in the UK post-Brexit. A Bloomberg report suggests that May’s plan is likely to fall short of the EU’s expectations, creating more division between the two sides. Theresa May has said in the past that she isn’t willing to guarantee the rights of EU citizens in the UK, unless there is some reciprocal pledge about the future of UK citizens living in the EU. The EU has made clear that it considers imperative that its citizens will retain their rights.

After the Bank of England’s (BoE) Monetary Policy Committee (MPC) member Andy Haldane commented on the interest rate hike yesterday, it seems that there is a deepening rift among the BoE’s policymakers. Haldane said that it would be prudent to tighten policy before the end of the year and that the increase in borrowing costs will come more quickly than the City was anticipating. His words oppose the BoE Governor Mark Carney’s opinion who has said that interest rates should be kept on hold because of Brexit uncertainty.

US Dollar – US Markets

The US Dollar gained small ground against the Euro with the exchange rate set at €0.89. The drop on oil prices that started yesterday, continued today making investors and traders nervous.

The Brent crude oil price per barrel fell below $45, which is a new low for 2017, and the worst price recorded since November 2016. The price bounced briefly when data regarding the larger than expected fall in US crude oil inventories were published. However, this didn’t comfort traders who are worrying that OPEC’s ability to affect global oil output is weakening.

According to market analysts, countries such as Libya and Nigeria have ramped up their production, as well as US shale oil producers, resulting to an oversupplied market. Some of them suggest that with the Brent crude price at $45 per barrel, it will soon be unprofitable for the US producers to continue in the same pace.

Euro – European Markets

The Euro suffered a minor drop against the US Dollar, trading at $1.11. The European Central Bank (ECB) published its latest monthly economic bulletin, which painted a rather positive picture of the economic conditions in the Eurozone.

ECB analysts suggest that the ongoing economic expansion in the Eurozone is increasingly resilient and has broadened across sectors and countries. The report notes that all data points to a solid economic growth in the second quarter of 2017. According to ECB’s experts, inflation volatility was mainly due to energy prices and some temporary increases in services over the Easter period.

Emmanuel Macron in an interview with Le Figaro, repeated that if the UK wants to reconsider its Brexit decision, the door of the EU is still open. The French president stressed that a stronger Eurozone integration is needed together with a common EU budget. Macron suggested that Germany is willing to accept change and contribute to the reforms.

Other Currencies – Highlights

Sterling remained stable against the Australian Dollar, trading at 1.67 AUD. The state of South Australia will consider imposing a new tax on the four major banks. This was revealed during a speech delivered by the Treasurer of State, Tom Koutsantonis. The federal government of Australia has already imposed a levy on the banks and has been criticised by bankers for this action. Koutsantonis justified the idea of a new tax by saying that “banks are closing branches, they are continually charging us to take our money out of the banks, they are making super profits and they are not paying their fair share of tax.”

The Pound dipped against the New Zealand Dollar, losing 0.35% in value and trading at 1.74 NZD. The Kiwi strengthened on news that the Reserve Bank of New Zealand (RBNZ) kept its rate at the record low of 1.75%. The RBNZ’s decision was largely anticipated by economists. RBNZ’s Governor, Graeme Wheeler, affirmed that the monetary policy will remain accommodative for a considerable period, but added that there is a possibility that it may have to be adjusted as numerous uncertainties remain. Wheeler noted that the rise in inflation recorded in the first quarter of 2017 seems to be temporary. The Governor said that the government’s recent budget changes should support the growth outlook.