The Pound remains strong in the markets after last week’s general election as British Prime Minister Boris Johnson eyes a vote in parliament soon to deliver his Brexit deal. Johnson will “get Brexit done” by the 31st January and then agree a new trade deal with the European Union by the end of 2020, cabinet office minister Michael Gove said on Sunday, vowing to deliver on the government’s top priority.
On Friday investors rushed to unwind bets on a weaker pound after a resounding election victory. Johnson’s victory has buoyed Sterling as Parliament should now operate unencumbered by division, and three years of political paralysis around Brexit should be ended. Importantly, Johnson is also not beholden to the ultra-euro-sceptic ERG as his majority is sufficient enough to press forward without them. This should remove the likelihood of a hard Brexit and does raise the possibility that Johnson may seek to extend the post-Brexit transition period beyond December 2020.
08.30 – EUR: German Markit Manufacturing PMI (Dec); expected to increase to 44.5 from 44.1
09.00 – EUR: European Markit PMI Composite (Dec); expected to increase to 50.7 from 50.6
09.30 – GBP: Markit Services PMI (Dec); expected to increase to 49.6 from 49.3