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A relatively quiet week from the U.K. in terms of economic data and headlines, so it’s likely Brexit uncertainty remained in effect to push Sterling pairs consistently lower the whole week.
United Kingdom Headlines and Economic data
Monday:
- What the European Parliament elections mean for Brexit
- Broad Sterling weakness on the session without a direct catalyst from the U.K., which arguably means that traders were reacting to the EU Parliament elections that saw big losses for the Conservative and Labour parties, and possibly on the uncertainty of who will be the next British Prime Minister and whether or not that person can deliver anything besides a no-deal Brexit. Also keep in mind that it was a bank holiday in the U.K., so the lower liquidity environment may have exaggerated that move lower.
Tuesday:
- UK mortgage approvals hit two-year high following Brexit extension
- Corbyn backs referendum on Brexit deal after EU election exodus
- EU’s Juncker says EU will not renegotiate Brexit withdrawal deal
Wednesday:
- Shop Price growth in May was the second highest inflation rate seen in the last six years, though it remains well below headline inflation
- Boris Johnson, favorite to be Britain’s next PM, to face court for alleged Brexit lies
Thursday:
- Brexit shutdown slashes UK car production by 45%
- Germany will veto Brexit extension unless UK holds a public vote, senior MP warns
- Brexit : Second referendum could break deadlock – Hammond
- Jeremy Corbyn signals U-turn on second referendum after party pressure
Friday:
- UK Consumer Confidence sunnier in May, but long-term forecast is less certain
- Net mortgage lending was £4.3 billion in April, slightly higher than the average of £3.8 billion seen over the previous six months
- Jeremy Hunt warns over ‘hard-line’ Brexit approach
- Trump Says U.S. Will Hit Mexico With 5% Tariffs on All Goods – This surprise event from the U.S. sparked global risk aversion sentiment as it comes just a few hours after the U.S. administration submits its already agreed trade deal with Canada and Mexico to Congress for approval. Changing the terms on a whim is likely read by the global community that trade deals with the U.S. aren’t something to be relied upon, and this is arguably further de-motivation for China to lock up a deal with the U.S. quickly, hence the risk-off behavior and yen rally. This hit the U.S. dollar pretty hard on the session as it all potentially leads up to Fed rate cuts, and a weak Greenback is likely why we saw the British pound rally during the morning U.S. session (with exception against the safe havens).
