Increased political uncertainty in the UK is obviously dominating markets. The Prime Minister’s new Brexit offer backfired spectacularly, and she has now confirmed she will resign as Conservative leader on 7 June.
It is now unclear whether the deal will be back for another vote, considering the high likelihood of it failing once again.
The increased risk of a general election, or indeed a no-deal Brexit, is weighing heavily on sterling.
Meanwhile the EU elections are only adding to the Prime Minister’s problems, with the final results due Sunday evening.
Elsewhere, global geopolitical tensions continue to be a concern, with the dollar benefitting from safe-haven flows.
On the exchanges, sterling unsurprisingly continues to break lower. GBP/USD tested 1.2600 yesterday, its lowest level this year. Sentiment remains weak, though we do expect solid buying interest at 1.2500.
GBP/EUR tested its 3-month lows just above the 1.1300 level, with the historically strong support level of 1.1200 now coming into focus.
|31/5/19||UK Mortgage Approvals||62.3k||63.5k|
|31/5/19||UK Net Consumer Credit||0.5b||0.9b|
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2589||+2.33%|
UK Benchmark Rates
|3 month||0.79575%||2 year||0.92%|
|6 month||0.89363%||3 year||0.96%|
|12 month||1.02388%||5 year||1.02%|
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