Today is an extremely quiet start to what looks to be a very busy week with regards to market movers, with no significant data releases or speeches being made all day. Inflation figures and speeches from the ECB will set the tone for EUR movement starting Wednesday, with inflation, jobs and export data out for the USA from 14:45 the same day.
Today, the market will likely focus on the seemingly inevitable election of Boris Johnson in the UK – with a mere three months to go until Brexit day on Halloween and a tremendous amount on the to-do list – a truly scary prospect for GBP stability.
This evening will see the end to just over a month’s worth of frantic political manoeuvering culminating in the election of the next leader of the Conservative party; and, of course, the UK’s next Prime Minister. Opinion polls have solidly favoured Boris Johnson throughout the process from day one – and despite a brief lull following a late-night row in Camberwell – have continued to soar, as more MP’s flock to his banner to save “missing the boat” with regards to winning cabinet positions.
With regards to the current cabinet; Philip Hammond, the Chancellor of the Exchequer and David Gauke, Justice Secretary, have outlined how they intend to resign before they are dismissed – as Johnson is insisting on each member of his new cabinet accepting that a No-Deal Brexit is on the cards come October if no progress has been made.
When the leadership contest results are announced tomorrow; Theresa May will tender her own resignation to the Queen and return to the backbenches, where she will no doubt have something to say to her successor with regards to the continuing Brexit saga.
Whilst politics can be a very subjective and occasionally volatile conversation at the best of times; the impacts upon the market are usually more matter of fact. If you are currently holding out on a transfer that involves GBP, either buying or selling, contact your account manager to discuss the market reaction post-election, as the opening first weeks of the premiership will set the tone for the pound’s fortunes right up to the Brexit finish line.
Have a great day.