Sterling remains on the back foot

Sterling remains under pressure, as news breaks that Theresa May is to face a vote of confidence in her leadership from within her own party, with the pound trading below $1.25 against the dollar and heading towards the 91p level (its 2018 to date low set in late July) against the euro. The single currency, meanwhile, has yet again failed to build on gains above $1.14 against the dollar and is trading closer to $1.13 this morning

The vote in Theresa May’s leadership of her party is scheduled for 6-8pm today. If she survives, it will strengthen her position so some extent and embolden her to press ahead with a vote in parliament on the Brexit deal, which she would still probably lose though. If she doesn’t survive, nominations for a new leader of the party will be called for and there will be a vote, first of MPs and then, if there is more than one candidate still left, of the party membership. All of this could take time of course, though the process could be shoehorned into a shorter period than normal given the exceptional circumstances prevailing

Economic data is taking something of a back seat at present as far as markets are concerned, given they have plenty else to be focusing upon! But for what it’s worth, the latest labour market  report in the UK shows a pick up in employment growth in the three months to October with the annual rate of growth in earnings (excluding bonuses) ticking up to 3.3%, the fastest pace of increase since 2008

Data due today include CPI inflation in the US, with the recent fall in oil prices likely to have contributed to a decline in the annual rate in November – the consensus expects a reading of 2.2%, down from 2.5% in October