GBP - British Pound
Theresa May has just announced the date of her resignation as Prime Minister to be 7 June. The race for her successor to be chosen is likely to be on 10 June, after President Trump’s next visit to the UK on 3 June. News from Downing Street suggests that foreign secretary Jeremy Hunt has encouraged May to kill off her Brexit bill, in another blow to her authority as PM. In contrast however, May has indicated that she is willing to modify her most recent Brexit deal.
All eyes now turn to UK retail sales, which came in at 0% m/m, which is 0.3% better than forecasted. This positive data offered slight relief for Sterling after a torrid few weeks for the British currency, plummeting to near-2019 lows against a number of its peers.
Escalations in the 10 month US-China trade war are weighing on US consumer and investor confidence, as four Federal Reserve policymakers pointed out on Thursday. Uncertainties surrounding the terms of trade between the world’s two largest economies has left businesses unable to effectively forecast for the future and could threaten economic growth in the US. Additionally, Fed policymakers are unable to make any definitive decisions regarding the future of U.S interest rate hikes. The Trump administration unveiled a $16 billion farm aid package to offset losses from trade war uncertainty.
On Thursday, President Trump predicted a swift end to the trade war despite the lack of high-level talks scheduled between the two economic heavyweights since the last round of negotiations in Washington two weeks ago. Trump also suggested that his administration’s blacklisting of Chinese telecom giant Huawei could be used as a vital bargaining chip for the US. Investor’s look towards U.S. durable goods orders, expected at 0.1%.
There was more disappointing data from the Eurozone on Thursday as Germany posted lower than expected manufacturing and services PMI’s, in a continuation of poor economic data released from the Eurozone’s largest economy. European elections continue over the coming days.