Rational Thinking – No Deal Likelihood Jumps

Last week:
GBP

  • Boris Johnson emerges as front runner to replace Theresa May
  • Boris vows to leave the EU with or without a deal
  • Johnson said he would scrap the Irish border backstop and withhold EU payment
  • 80% likelihood of Boris Johnson as next PM
  • Raises likelihood of no deal Brexit

This week:
EUR

Tuesday – ECB President Draghi Speaks

  • Worsening outlook for EU

USD

Wednesday – Federal Reserve Meeting and Statement

  • US Growth is weakening, potential for dovish stance

GBP

Tuesday to Thursday – Conservative candidates to be reduced to two
Thursday – Bank of England’s Super Thursday

  • Mixed communication from members including some pessimism