Good morning,
Today is a largely data quiet day, with digesting yesterday’s ECB meeting policy changes and the first statement as Prime Minister by Boris Johnson. There are GDP and inflation numbers due out in the USA at 13:30, which help paint a picture of the impacts of the ongoing China/US trade dispute stateside.
With the new Conservative front bench dominated by more pro-Brexit ministers, the rumours from Westminster are beginning to point towards a possible vote of no confidence in Johnson already – as Europhile Conservative MP’s believe it could be the only way to de-rail a no-deal Brexit scenario.
Whether this is realised or not, the market has been tentatively pricing in general election risk, which could feasibly damage GBP’s recovery as much as no-deal, which is now being planned and funded for. It remains to be seen if Johnson’s “Golden Age” can be realised on his optimism and enthusiasm alone, as the clashes between Brussels and London have already begun, yet again, over the Irish backstop.
Across the Channel, the ECN hinted at an interest rate cut and a reintroduction of quantitative easing to assist the struggling economies of Europe. The USD made headway against the EUR, pushing EURUSD to yearly lows of 1.1120 before rebounding; the Pound cannot push through the political roadblocks to make any real gains out of range, with headlines still dominating the pair as and when the news breaks.
Have a great day and an even better weekend.