Boris survives confidence vote

Today's news headlines:

‘Boris Johnson clings to power, but question is for how long’. UK Prime Minister Boris Johnson survived his confidence vote on Monday evening, with Tory MPs voting 211 to 148 in favour of a continuation of his leadership. Johnson galvanised the Conservative party in 2019, securing a majority, but this began to unravel as the Covid-19 pandemic took hold, with scandals and mismanagement tarnishing his and other cabinet members’ reputations. Johnson hailed the victory and promised tax cuts to tackle the cost of living crisis while also insisting a snap election is not on the cards. (Bloomberg) 

‘Yen slumps to 20-year low on widening policy gap’. The Japanese Yen fell to its lowest levels since 2002 this morning reaching 133 against the Dollar as US Treasury yields rise. The Bank of Japan continues to follow a dovish monetary policy strategy despite every other developed nation opting to tighten policy. Analysts at Wells Fargo can’t see this trend dissipating anytime soon, with Yen crosses likely to remain weaker assuming monetary policy paths continue as planned in the coming months. (Bloomberg) 


Today

Asian stock markets moved lower overnight, with US futures also in the red. The Reserve Bank of Australia hiked interest rates by 50 basis points, double what analysts had forecast, the largest hike for 22 years. Sovereign yields are mostly higher this morning, while Brent crude trades above $120 per barrel.  

Events

BRC Retail Sales Monitor y/y (May): -1.5% 
German Factory Orders m/m (April): -2.7% (est. 0.4%)
US Trade Balance (April): 1:30PM
Canada Ivey PMI (May): 3:00PM

Interbank rates:
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GBP/USD – 1.2481
GBP/EUR – 1.1673
EUR/USD – 1.0692
USD/CAD – 1.2597

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