Good morning,

The pound saw some welcome support yesterday as Angela Merkel gave a breath of life to the Brexit back and forth, announcing that the EU would consider “practical solutions” around the Irish backstop. The fact that the market jumped up almost a cent on the Dollar and about 60 pips on the EUR is really telling of the appetite for the pound and a smooth Brexit agreement.

Boris Johnson will meet Merkel today following this development, with markets waiting with baited breath for any remarks or push backs. Johnson has made his stance clear in that he requires the backstop to be removed to entertain a prospect of a deal.

Italian politics took centre stage in the EU yesterday, with Prime Minister Conte resigning following the vote of no confidence. The GBPEUR will continue to lack definitive direction with both sides showing leaks, with a real Brexit development likely the driver to impact a meaningful change here.

FOMC minutes will be released in the US tonight and, as always, the tone of the release will be widely scrutinised – Trump’s twitter should be kept on the radar for any comments following.

The week ahead brings the annual gathering in Jackson Hole this Thursday, where policymakers will have serious discussions around central bank strategy for combatting missing inflation targets, as well as inconclusive trade negotiations. The Federal Reserve Chairman, Jay Powell, will speak on Friday following this, with markets likely to react with dynamism.

With a lot in the headlights to finish the week and markets likely to thin out over the August bank holiday, there is a great opportunity to discuss with your account manager target levels to cover your exposure and utilise market orders. Give us a ring on 02073269120 to discuss in more detail.

Have a great day ahead.

Author: Ross Hammond, Senior Corporate Account Manager