Day 1 of the EU Economic Summit took place in Brussels yesterday. European Union lawmaker’s stated that the UK should exercise article 50 of the Lisbon Treaty as soon as possible. Furthermore, Nigel Farage took the opportunity to speak to its members, saying that he had achieved his ultimate goal and that the referendum’s result was a reaction to Europe’s intention to impose a political union by “stealth” and “deception” and that policy makers are in denial about their failures. In addition, Angela Merkel, in what seems her toughest comment yet, warned the U.K. to have no illusions about life outside the European Union while meeting David Cameroon for his final EU summit following last week’s result.
Former Bank of England governor Mervyn King, stated that “political uncertainty and the consequences of that, and the uncertainty which it creates, are I think one of the things which are driving volatility in financial markets.” Lastly, Jeremy Corbyn loses no confidence vote by 172 to 40 as Labour MPs try to remove him as party leader after his ‘weak’ remain campaign.
Final gross domestic product quarter on quarter was released at 1.1%, which is slightly better than forecast at 1.0%. However, undermining the dollar, US money markets are pricing out any chance of the Federal Reserve raising interest rates in the coming months, most likely due to potential impact and systemic ramifications of a Brexit on global financial markets - as mentioned by Fed Chair Janet Yellen at the previous FOMC meeting.
USD - 15:30 – Crude Oil Inventories expected to fall to -2.3M
EUR – Day 2 – EU Economic Summit on global economic conditions & Brexit