Sterling slides

Amid high political drama in the UK, sterling fell further yesterday, and it remains under pressure this morning, slipping to almost $1.26 against the dollar and trading at almost 88.5p against the euro. The latter continues to edge down against the US currency and is hovering just below $1.1150 at the off. Meanwhile, bond yields in the core markets headed south again yesterday, led by a sizeable enough fall in UK bond yields

With PM May’s “bold” new Brexit deal seemingly dead before it arrives, rumours of her imminent resignation were rife yesterday. She’s still in situ this morning – albeit she has lost one of her minsters who has departed in protest at the latest proposals – but reports say she will meet the chair of  the influential 1922 committee tomorrow which could seal her fate. In any case – whether she survives or not – how, when and if Breixt is delivered remains as unclear as ever, which is a recipe for further sterling weakness

The minutes of the Fed’s latest meeting – which was held before the recent round of US-China tit-for- tat tariffs, but also before the release of much better than consensus US labour market data – noted the “unexpected” strength in first-quarter GDP growth but also lower than expected inflation readings recently. In light of this, officials concluded that a “patient approach to determining future changes” in interest rates would “likely remain appropriate for some time”, which translated would seem to mean unchanged rates for the foreseeable future

Data due today includes flash PMIs in the Euro Area and the US, with jobless claims and new homes sales scheduled in the US as well