- The UK economy contracted for the first time in 7 years during the second quarter of 2019 according to figures released by the ONS. Official figures showed the economy shrank by -0.2% in the period between April and June, with factors such as the unwinding of Brexit stockpiles and car industry shutdowns pointed to as key contributors.
- The economy would of course need to register two consecutive quarters of decline to fall into a technical recession, but speaking after the release UK Chancellor Sajid Javid said ‘I am not expecting a recession at all. And in fact, don’t take my word for it. There’s not a single leading forecaster out there that is expecting a recession.”
- The Chancellor’s bullish outlook could not however prevent the Pound sinking even lower in FX markets following the weak GDP print. Sterling plummeted into the Mid-1.2000’s against the Dollar, with GBP/EUR declining into the Mid 1.0700’s.
- Of course the main driver of Sterling weakness at present is the impending threat of a no-deal Brexit, and BNP Paribas raised their probability of a no-deal exit to 50% on Friday.
- Italian Trade Balance 5.73Bn (4.23Bn Exp).
- Canada Employment Change -24.2K (+15.2K Exp).
- Canada Unemployment Rate 5.7% (5.5% Exp).
- US PPI m/m 0.2% as expected.
- US President Trump took yet another shot at the US Federal Reserve on Friday, stating that the US economy was being ‘handcuffed’ by the Fed’s monetary policy and that he would like to see rates dropped by a full percentage point.
Over The Weekend
- Outgoing European Commission President Jean-Claude Juncker said that regardless of the rhetoric to the contrary coming from Boris Johnson and his Government, a no-deal Brexit would hurt the UK more than the EU, although he added that it was in no-one’s best interests ultimately.
- The Sunday Telegraph have reported that Boris Johnson has accepted an offer to meet Irish PM Leo Varadkar over Brexit, with dates and times yet to be confirmed.
- There are reports that Labour MP’s have been told to cancel any travel plans during early September as they might be preparing to table a motion of no-confidence in the Government as they seek to prevent a no-deal Brexit.
- No economic data or key note speakers due today.
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