The interesting thing will be to see how he gets on this week – his first week in office and his first real test of the week; Scotland. He’s going to try and throw money at the nations in a bid to renew “the ties that bind our United Kingdom”. A £300m fund split across Scotland, Wales and Northern Ireland doesn’t really seem like much (especially as it cost Theresa May £1bn to keep the DUP happy) and isn’t likely to stop the very large shouts against a no-deal. Ruth Davidson has said she won’t support a no-deal outcome and Nicola Sturgeon is using this as leverage to get the independence vote firmly back on the agenda – a pertinent quote in Al Jazeera from ‘Scot goes Pop’ blog “He’s one of the British prime ministers who occasionally come along just to remind the people of Scotland that they really do live in a different country”!

In a shot across the bows of the UK; the EU has removed certain financial market access rights for Canada, Brazil, Singapore, Australia and Argentina after they’ve ruled that they’re not regulating their credit ratings agencies as tightly as the EU The rhetoric turned strongly towards a no-deal over the weekend, with Michael Gove saying that this is the outcome now being assumed by the government (you know what they say about assume, Michael?)  The market has taken his words to heart and Sterling is firmly back on the ropes and the Boris boost that it did receive has clearly departed.

does and therefore ‘equivalence’ rules cannot be relied upon. These equivalence rules are a key of the UK continuing to do business in any scenario of life outside the EU and a sign that the EU takes this stuff seriously (perhaps more seriously that they otherwise would?)

It’s OK though; Liz Truss is ready to make a trade deal with the US her number one priority. Writing in the Telegraph Ms Truss has assured us that the NHS isn’t up for sale – but good luck trying to tell the US that.

Sticking with US trade: Trump says he could tax French wine in retaliation for France starting to impose taxes no tech giants. France has urged him not to threaten taxes as they try and get to grips with how to fairly tax these revenues. Sticking to form, Trump stayed cryptic and said tariffs “might be on wine, it might be on something else” (spoiler: it’ll be on wine)

It’s a big week for Trump’s monetary policy agenda: The Fed will decide whether to cut interest rates. The market sees it as a foregone conclusion and there’s plenty of support for such a move – despite the economy growing strongly. One counter argument well worth a read is this article from Barrons. It’s a long read, but well worth it.

The rate cut will do well for the Treasury though, as their debt binge shows no sign of abating. Bloomberg reports that most of the market expects debt issues to increase over the coming months and years as the debt ceiling has been suspended for the next two years, effectively giving departments carte blanche to spend. The budget watchdog committee called the last budget deal “a total abdication of fiscal responsibility by Congress and the President” – reassuring.

China, sensibly, ‘will pursue the diversification of its foreign exchange reserves in a steady, prudent way’ according to a Reuters article. China have already managed to reduce their US dollar reserves from 79% in 1995 to 58% in 2014 and are likely to continue to try and move that down some more (especially given the above). China holds $3.1 trillion dollars in foreign exchange reserves, dwarfing the second biggest holder, Japan, who hold $1.3 trillion.

This week is data heavy, with the Fed being the last big event of July and non-farm payrolls the first big data event of August – both due this week. Boris will hold Brexit meetings with cabinet every day this week – but we’d rather he was holding meetings with the EU over this!

Have a great week.


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