- Prime Minister Theresa May was forced to reshuffle her cabinet yesterday as Foreign Secretary Boris Johnson joined Brexit Minister David Davis by resigning.
- Johnson wrote a lengthy letter to PM May explaining his decision which was based on his view the UK is heading for “semi-Brexit” with large parts of the UK economy tied to the EU system with no control over that system. He added that the “dream is dying, suffocated by needless self-doubt”.
- Jeremy Hunt has been appointed Foreign Secretary following Johnson’s resignation and Dominic Raab was promoted to the cabinet as Brexit secretary following Davis’ resignation.
- The new-look cabinet was meeting at Downing St this morning for the first time with PM May emphasizing the point that the alternative to a united Conservative government is a left-wing administration lead by Jeremy Corbyn.
- Sterling took a hit on the news that Johnson had stepped down from the cabinet likely due to the idea that the team charged with negotiating the UK’s exit from the EU cannot agree on the best approach.
- GBP/EUR opened at 1.1311 and was traded a high of 1.1345 before coming off to trade a low of 1.1242. The market did partially recover to close at 1.1278.
- Sterling also lost value against the US dollar with GBP/USD opening at 1.3317 before trading a low of 1.3189 and then closing at 1.3256.
- ECB President Mario Draghi said that Europe needs to be ‘patient, persistent and prudent’ in their policy to ensure that inflation remains on a sustained adjustment path.
- EU Council President Tusk said the mess resulting from Brexit is still far from being solved.
- NAB Business Confidence from Australia came in at 6 overnight after posting 7 last time.
- Chinese CPI y/y came in as expected at 1.9%.
- GBP/AUD, GBP/NZD and GBP/JPY are currently trading at 1.7806, 1.9431 and 147.27, respectively.
- We had data from the UK this morning in the form of GDP m/m which came in at 0.3% and manufacturing production m/m which fell short of expectations coming in at 0.4% vs 1.0% expected.
- The UK trade balance was released at -12.4B whereas that market was expected a figure closer to -11.9B.
- At 10am we have German ZEW economic sentiment from the Eurozone.
|Currency Pair||Interbank Rate||% Change on Day|
|Time (GMT)||Region||Data Release||Forecast||Previous|
|10:00||EUR||German ZEW Economic Sentiment||-17.9||-16.1|