Prime Minister May confirmed that she would resign as Conservative Party leader on June 7th.
Reservations over the US growth outlook continued to hamper US sentiment following last week’s weaker than expected PMI data with benchmark bond yields close to 19-month lows.
The dollar was still protected by weak sentiment towards other major currencies with a slight net recovery as Monday’s US and UK holidays limited activity.
On-going political concerns continued to undermine Sterling support.
Global equities secure tentative gains on hopes for a moderation in US trade rhetoric. Oil prices partially recovered from last week’s losses as supply concerns persisted. A subdued dollar helped underpin precious metals, although gold gains were limited.
UK retail sales were unchanged for April, above expectations of a 0.3% decline, although underlying sales declined slightly. There was a weak reading for the May CBI retail sales survey, although companies were expecting a recovery for June.
Prime Minister May confirmed that she would resign as Conservative Party leader on June 7th. After initial selling pressure, Sterling was able to secure a tentative recovery on short covering following sustained losses during the week.
CFTC data recorded a renewed increase in Sterling shorts, but positive developments will be needed to trigger a reversal.
As expected, Conservative and Labour parties lost substantial support in the EU elections with polarising gains for pro and anti-Brexit parties. Political sentiment remained broadly negative with markets uneasy over the risks of a no-deal Brexit, especially given the potential for a hard-line Conservative Party leader following May’s resignation.
GBP/USD was unable to hold above 1.2700 while GBP/EUR fell to around the 1.1300 area and Sterling was unable to recover ground on Tuesday as UK markets re-opened with political stresses still undermining sentiment.
|06:45||CHF GDP (Y/Y)||1.00%||1.50%|
|06:45||CHF GDP (Q/Q)||0.30%||0.30%|
|07:00||CHF Trade Balance(APR)||2.980B||3.247B|
|07:00||German GfK Consumer Confidence (JUN)||10.4||10.2|
|08:00||GBP Nationwide House Prices (Y/Y)(MAY)||1.20%||0.90%|
|08:00||GBP Nationwide House Prices (M/M)(MAY)||0.00%||0.40%|
|09:30||GBP BBA Mortgage Approvals||39.3K||40.0K|
|10:00||Euro-Zone Consumer Confidence(MAY)||-||-|
|14:00||US House Price Index (M/M)(MAR)||-||0.30%|
|15:00||USD CB Consumer Confidence(MAY)||126||129.2|
|15:30||USD Dallas Fed Manufacturing Business Index(MAY)||-||2|
|22:00||NZD RBNZ Financial Stability Report||-||-|