Yesterday, Angela Merkel found a temporary solution with its Bavarian sister party, the Christian Social Union, over the immigration plan imposed last week. It will agree to send any immigrants who entered via Bavaria’s border back to Austria, at least those that originally applied for asylum in Austria. The impasse had been weighing on market sentiment, pushing EUR/USD lower, seeing it briefly drop below 1.16 before rising on the news. This euro rally means that GBP/EUR is back below 1.13.
In other news yesterday, German manufacturing PMI printed in line with expectations at 55.9. French and Italian PMIs printed below and above forecasts respectively. Like the UK number, the data was largely shrugged off.