The Prime Minister made a bold move this week by gaining approval from the Queen to prorogue Parliament from mid-September through to mid-October, which has left very little time for MPs to try to halt a No-deal Brexit. A vote of no confidence appears to be a highly probable outcome.
Boris is adamant the UK will leave the EU on 31st October with or without a deal, believing this latest action is the best way to force through an exit. However, the EU have warned the move could increase the chances of a no deal. It is envisaged that the EU Council will agree any new proposed agreement on 17-18 October.
In the US, there is fresh optimism with Trump claiming that the US and China will resume trade talks with a hope of making a deal. This came after Trump vowed to raise tariffs further on $250bn worth of Chinese imports.
The FED Chief delivered a speech at Jackson Hole last Friday. Powell kept future interest rate cuts squarely on the table with a 0.25% cut expected in September. He continued to explain that the US economy was in a good place but if the US/China trade war continues, it could have some serious economic risks.
The proroguing of Parliament caused Sterling to drop from 1.2290 to as low as 1.2170. It has found some support around this level with 1.2250 being the initial topside to watch.
GBP/EUR dropped from close to 1.11 to below 1.0970, also affected by the suspension of parliament, support now found at 1.10 with 1.11 being the initial topside to watch.
|02/09/19||Uk PMI Manufacturing||48.0%||48.3%|
|03/09/19||CIPS UK Construction PMI||45.3%||45.5%|
|04/09/19||CIPS UK Services PMI||51.4%||51.2%|
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2757||+9.01%|
UK Benchmark Rates
|3 month||0.75488%||2 year||0.65%|
|6 month||0.77950%||3 year||0.59%|
|12 month||0.83888%||5 year||0.59%|
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