07/11/2017 - May Provides Little Detail to Business Lobby

GBP

Sterling recovered some losses on Monday after slipping against the dollar for three consecutive weeks, but any strong gains were checked by continued uncertainty around Brexit talks and instability in the governing Conservative party.

Investors are monitoring the negotiations around Britain’s future relationship with the European Union for the impact not only on business confidence and economic growth, but also on the likelihood of further interest rate increases, after the Bank of England’s decision to raise rates last week.

Britain’s most powerful business lobby group urged British Prime Minister Theresa May on Monday to provide clarity on how Brexit will work, but she responded with few details beyond reiterating plans to seek a transition deal as soon as possible.

The group, the Confederation of British Industry, said on Sunday that almost two in three British companies will have contingency plans in place by March for the possibility that Britain leaves the EU without a deal.

Britain enters the next round of Brexit negotiations at the end of this week, during which the all-important topic of its future trade relationship with the EU is due to be discussed for the first time.

USD

House Republicans last week unveiled the first draft of a bill that, if enacted, would be the biggest revamp of the U.S. tax system since the 1980s. The House tax-writing committee begins revising the bill on Monday, with tweaks and some more substantial changes expected to a number of individual and corporate tax proposals.

On Monday, the Federal Reserve Bank of New York confirmed that William Dudley, among the most influential monetary policymakers throughout the financial crisis and its aftermath, expects to retire by mid-2018. That raised another question over leadership at the U.S. central bank less than a week after President Donald Trump chose new Fed chief Jay Powell.

Key Announcements

09.00 – EUR: ECB President Mario Draghi Speaks at the ECB Forum on Banking Supervision