Sterling’s short-lived gains

Sterling gained some ground yesterday after Theresa May outlined a new “bold” Brexit deal she hopes MPs will pass in Parliament in early June. However, this proved short-lived with the pound subsequently setting fresh lows of under $1.27 against the dollar and close to 88p against the euro. The market clearly doesn’t believe the deal will be approved and, indeed, Labour has since come out and said it would not support a repackaged old deal. Meanwhile, the euro is little changed against the dollar this morning trading at around $1.1150

It was a better day for equity markets yesterday with both European and US stocks closing in positive territory (by between 0.5% and 1%). This in turn saw core bond yields edge up on the day albeit by just 2-3bps

PM May has said that, as part of the Withdrawal Agreement Bill, MPs will be given the chance to support a temporary customs union as well as an opportunity to decide whether any agreed Brexit deal should be put to a second referendum. As part of the new deal also, the UK government will seek alternative arrangements to replace the backstop, while also committing that, should the backstop come into force, Great Britain will stay aligned with Northern Ireland

The OECD has lowered its forecast for global GDP growth for this year a touch to 3.2% (previously 3.3%), with the pace of activity expected to tick up to 3.4% in 2020

Data published yesterday by the CSO showed that employment in Ireland rose by 3.7%, or 81,200, year-on-year in the first quarter of 2019; on a seasonally adjusted quarter-on-quarter basis the increase was 1.5%, or 35,200. The unemployment rate stood at 5.0% in Q1 and the estimate for April 2019 was revised down to 4.6%, from 5.4% previously

On the data front today, we get CPI inflation and house prices in the UK, while the Fed releases the minutes of its recent monetary policy meeting