Sources indicated that Prime Minister May would not resign on Friday but would announce her departure date.

Euro-zone PMI data was weaker than expected, although shaper misses for the US manufacturing and services data had a bigger market impact.

Weak US data reversed US dollar gains as it eventually posted net losses for the day with EUR/USD recovering from a brief dip to 2019 lows.

The data overall triggered renewed fears over the global growth outlook, especially with unrelenting trade concerns.

US benchmark 10-year bond yields declined to 2019 lows near 2.30% with stronger expectations of dovish global central banks.

Equity markets declined sharply amid trade and growth fears, although there was some resilience in Asia on Friday.

Oil prices declined very sharply with daily losses of close to 5% as global growth fears triggered a liquidation of long positions. Precious metals regained ground amid a weaker US dollar.

Media coverage of UK politics was less frenetic on Thursday due to restrictions on reporting as EU election voting took place, but underlying tensions remained intense. Ahead of the New York open, sources indicated that Prime Minister May would not resign on Friday but would announce her departure date with speculation that there would be a no-confidence vote if she refused to stand down. There were also reports that the Brexit Withdrawal Bill would be abandoned given intense opposition.

Benchmark UK 10-year gilt yields declined to the lowest level since the beginning of April, although the impact was offset by lower yields elsewhere. Fragile risk appetite and a slide in oil prices also had a negative impact on Sterling, especially as the UK runs a substantial current account deficit. GBP/USD rallied from 4-month lows near 1.2600 to 1.2680 as the US currency dipped lower, but GBP/EUR maintained weakness as it closes in on 1.1300 with May’s announcement expected later in the day.

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