GBP - British Pound
Michael Gove, the minister in charge of No - Deal Brexit preparations, accused the EU of intransigence over EU talks. After a quick Google its apparent that Gove is accusing the EU of refusing to change their mind in regards to Brexit re-negotiations. This alongside of tensions in the market elsewhere saw the pound slip back towards the two year lows we saw recently after Boris Johnson took over at No. 10.
The big sterling event for the week will be tomorrow in the form of UK GDP for the second quarter with some analysts expecting that a contraction could be printed. With the UK composite PMI showing contraction and London house prices dropping 4% there's an argument to be made that growth will also follow into negative territory. The only beacon of hope for the pound may be the UK consumer though who continues to hit the high street in the face of the continued uncertainty.
The market remained jittery yesterday as investors took wind of the increased trade tensions from the start of the week. Whilst leading indexes tried to stop the rut of losses it was the yield on the crucial and incredibly safe 10 year US Treasury Bill dropping that got the market talking. It's clear that the market is busy at the moment buying safe haven assets with gold also hitting six year highs as big concerns emerge over trade tensions. Indeed Federal Reserve voting member Charles Evans pointed out yesterday that the Fed may need to cut interest rates again. The market is now anticipating a 60% chance of another rate cut in September and then again in December.
Meanwhile, overnight the People's Bank of China set their benchmark interest rate above 7 against the USD for the first time in over a decade in another signal that the PBOC is willing to utilise its currency in order to offset tariffs imposed by Donald Trump.
1.2125 - 1.2185 ▼GBP/EUR:
1.0810 - 1.0890 ▼GBP/AUD:
1.7930 - 1.8180 ▼GBP/NZD:
1.8780 - 1.8900 ▼GBP/CAD:
1.5980 - 1.6200 ▼