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Sterling had a quick reprieve from its decline as PM May pledged to see Brexit through, but the selling resumed on increasing chances of a messy breakup.

Wall Street traders seem to be getting tired of the Brexit drama, though, as they’ve turned their focus to trade-related developments later in the day. Rumors of a possible reversal in U.S. auto tariffs on China gave hope that the trade war between the two nations might soon come to an end.

Major Events/Reports:

Mayday for PM May?

Brexit continued to hog the spotlight for the earlier part of the session and market watchers grabbed their popcorn when U.K. PM May held a press conference to address the latest turn of events.

As of this writing, Brexit Secretary Dominic Raab, Work and Pensions Secretary Esther McVey, junior Northern Ireland minister Shailesh Vara, junior Brexit minister Suella Braverman, parliamentary aide to education ministers and a Conservative Party vice chairman have all quit.

Ahead of May’s presser, there have been whispers that Environment Secretary and Brexit advocate Michael Gove will also resign or possibly replace Raab as Brexit secretary only if he can renegotiate the deal. However, a Times editor later on tweeted:

During the press conference, PM May appealed for unity, stating:

“The choice is clear: We can choose to leave with no deal, we can risk no Brexit at all, or we can choose to unite and support the best deal that can be negotiated.”

When asked about a potential no-confidence vote, No. 10 responded:

“As Prime Minister, my job is to bring back a deal that delivers on the vote of the British people… which is in the national interest. Am I going to see this through? Yes.

A number of her political allies reiterated that May is the best person to deliver on Brexit and that if there’s anyone who can strike an agreement with the EU, guess what, it’s gonna be May.

According to the BBC, Conservative MPs have not yet submitted enough letters to trigger a confidence vote. They would need 48 letters to be addressed to the chairman of the party’s 1922 Committee, Graham Brady, to do so.

PM May assured that she would fight for her leadership when it comes to this and that there will be no second referendum. Meanwhile, credit rating firm S&P Global warned of a credit rating cut if the chances of a disorderly Brexit rises.

Trade hopes boost risk appetite

A Financial Times report suggesting that the U.S. might be looking into reversing auto tariffs imposed on China gave market watchers hope that both nations could soon retract their claws in their trade fight. This comes ahead of a G20 Summit by the end of this month when Trump and Xi are scheduled to meet.

Sources familiar with the matter shared that trade representative Robert Lighthizer told some industry executives the next tranche of measures was already on hold. However, a spokesperson later on denied this.

U.S. equities still managed to close in the green:

  • Dow 30 index is up 208.77 points to 25,289.27 (+0.83%)
  • S&P 500 index is up 28.62 points to 2,730.20 (+1.06%)
  • Nasdaq is up 122.64 points to 7,259.30 (+1.72%)

Major Market Mover(s):

GBP

The pound paused briefly from its dive as PM May pledged to see Brexit through and fight against a possible leadership challenge. However, bears quickly returned on expectations of more political drama.

GBP/USD pulled up to 1.2838 then resumed its slide to a low of 1.2724; GBP/JPY bounced to 145.67 then tumbled to 144.27; EUR/GBP is up to .8889, GBP/NZD is down to 1.8708, and GBP/AUD is down to 1.7555.

Watch Out For:

  • 8:30 am GMT: ECB head Draghi’s testimony at the Frankfurt European Banking Congress