Overnight, the UK PM announced she will bring the Brexit withdrawal agreement bill in front of parliament again on the 3rd of June. This will be the fourth attempt to get this through and feels a little like the final chapter. Unemployment data from the UK was mixed yesterday.
It's great news to see that the percentage of unemployed has dropped again. It's now sitting at 3.8%, which is the lowest since the mid-70’s. Average earnings came in at 3.2% which was below expectations, but still way above inflation at 1.9%. In theory the British public should have more money to spend.
Nevertheless, the pound has weakened across a basket of currencies as traders and investors are selling sterling on the back of Brexit concerns. Cross-party talks continue to rumble on, however solid progress seems elusive at this stage. A strong showing for the Brexit party in upcoming European elections and the likelihood of Theresa May being replaced with a hard-line Brexiteer may be the catalyst that prompts some progress between the Conservatives and Labour.
On the Euro front, the poor economic data continues to come. Q1 GDP for Germany was disappointing at 0.6% provisionally. Therefore, the composite number is due to be reported lower than the previous estimate. This will drive the ECB to consider another round of TLTRO’s and other monetary policy loosening measures. This weakened the single currency, and leaves it vulnerable to downside pressures.
The US Dollar remains stable despite the ongoing uncertainty regarding the trade war and tariff debacle. The Dollar has seen positive flows due to the Pound and Euro coming under pressure.
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