Confusion Continues

26 June, 2019

Paul Newfield

With the winner set to take over the PM-ship from Theresa May on the 24th of July, it would be to the surprise of nobody that the two remaining tory leadership candidates have opposing views on what will happen with Brexit and the overall outcome, with Jeremy Hunt claiming that the 31st October date is a “fake deadline” and that a general election would be called, immediately following.

Boris Johnson, however, continues to claim that “we must leave the UK, deal or no deal”. Interestingly it would seem that Hunt has the backing of trade secretary Liam Fox who disagrees with Johnson’s claim the UK could continue trade with Europe, tariff-free. Both Johnson and Hunt have promised to renegotiate May’s withdrawal plan with particular focus on the Irish backstop.

Financial Markets
Yesterday morning saw the pound weaken off further against the euro, dropping half a cent against the single currency between 9 am and midday and has flatlined thereafter. Against the US dollar sterling has seen a decline of a cent, with a gradual decline over the last 24 hours. A similar pattern can be seen against the Australian dollar, indicating sterling weakness across the board, no doubt in part due to Brexit turns but also the lack of strong UK data published yesterday with the majority coming from the US.

Eco Stats
There were a couple of European Central Bank speeches from De Guindos and Coeure over the course of the day but the vast majority of data came from the USA with a large raft of outcomes. There were three speeches from Fed members Williams, Bostic and Powell. Home price indices, new home sales and new home sales change and the Richmond Fed Manufacturing Index all came in negatively, whilst the housing price index saw a positive outcome, up from the previous level and the expected.

On Wednesday we can expect to hear a speech from BoE governor Mark Carney and the following inflation report hearings at 10:15 this morning. As of writing, the ECB’s non-monetary policy meeting is ongoing with Mersch speaking at 10 am. This is after UK mortgage approvals at 9:30. This afternoon sees data from the US in the form of goods orders with a speech by the Fed’s Daly to round thing off at 4:30 pm.

As ever, so as to get the most out of your money and to not let what happens to the amount of currency you buy fall solely to chance and the Brexit, talk to one of our currency consultants about how we can give you more control over what exchange rate you can get in the future, in the form of Forward Contracts, Limit Orders and Stop-Loss Orders.