Cross Party Brexit Talks Collapse

GBP

Sterling ended a tough week by trading at four-month lows after cross-party Brexit talks between the government and Labour opposition collapsed and concern grew around the impact of Theresa May being forced to resign. There was no great surprise in the collapse of the talks, but confirmation of further uncertainty saw the pound slump to its worst week since February.

Friday saw Theresa May meet with the Conservative 1922 committee, where she agreed to set out a timetable for her departure in early June, when it is expected that her withdrawal deal will be voted against for the 4th time in Parliament. We now have the likely scenario of a Conservative leadership battle producing a more Eurosceptic leader who would be more inclined to move Britain to a no-deal Brexit. After months of speculation, Boris Johnson has already thrown his name into the ring. As a result, financial markets were pricing in a higher probability of a no-deal exit and the pound therefore suffered as a result.

Key Announcements

23.00 – USD: Fed Chair Powell Speech