The pound hit multi-year highs against peers on Friday as early UK election results pointed to a convincing Conservative win, which is expected to clear the Brexit political gridlock that has hounded Britain’s markets for years.
Prime Minister Boris Johnson won a resounding election victory on Friday that will allow him to end three years of political paralysis and take Britain out of the European Union within weeks.
In a political earthquake in England, the Conservatives won large numbers of seats in the opposition Labour Party’s so-called Red Wall, traditional working class heartlands once hostile to Johnson’s party.
Brexit, which has shattered old party loyalties and divided Britain along new fault lines, was the cause of the shift. In the Red Wall, a majority of voters favoured leaving the European Union and rejected Labour leader Jeremy Corbyn’s ambiguous stance on the issue.
A big majority may allow Johnson to extend the trade talks beyond 2020 because he could overrule the Brexit hardline European Research Group (ERG) faction in the party.
Christine Lagarde struck a more upbeat tone on the economy in her first news conference as head of the European Central Bank on Thursday and promised a new style of leadership as she outlined a sweeping one-year review of the bank’s workings.
With the euro zone economy barely expanding, the former IMF chief firmly embraced the ECB’s easy money policy but suggested that the worst of the bloc’s slowdown may now over and an often-discussed but elusive recovery could now begin.
Lagarde also tackled head-on the keen anticipation in markets and media about how she would follow on from predecessor Mario Draghi, a technocrat who was hailed as one of the world’s best communicators with a deep understanding of monetary policy.
Rejecting the traditional labels of the central banking world, Lagarde said she was neither a policy hawk nor a dove, but rather an owl, who will use her wisdom to create the broadest possible consensus to heal a recent rift in the Governing Council.
Washington has set its terms for a trade deal with China, offering to suspend some tariffs on Chinese goods and cut others in exchange for Beijing buying more American farm goods, US sources said on Thursday.
Beijing’s silence, however, fueled questions over whether the two sides can come to a truce in their bitter trade war before a new round of tit-for-tat tariffs takes effect on Sunday.
A source briefed on the status of bilateral negotiations said the United States would suspend tariffs on $160 billion in Chinese goods expected to go into effect on Sunday and roll back existing tariffs.
New Chinese tariffs on US goods are due to take effect at 0401 GMT Sunday and new US tariffs on Chinese goods will apply at 0501 GMT. Both would need to make formal announcements to postpone or cancel these tariffs.
13.30 – USD: Core Retail Sales MoM; Forecast at 0.4% against previous of 0.25
13.30 – USD: Retail Sales MoM; Forecast at 0.5% against previous of -0.1%