17th May 2019
Theresa May has confirmed she will announce a date for her departure next month, even if she has not delivered Brexit. The Prime Minister has agreed to meet with the executive of the 1922 committee, the powerful backbench committee of Tory MPs, at the beginning of June, when they will “agree a timetable for the election of a new leader”.
Meanwhile, Boris Johnson has confirmed that he will run to replace Mrs May as leader of the Conservative Party. Mr Johnson told a private event in Manchester “of course I’m going for it”. No surprise there.
The pound tumbled to a five-month low against the dollar and entered a ninth day of decline versus the euro as the City fretted over the hotly-contested race in the Conservative Party to succeed Theresa May. Sterling extended its slide after the prime minister confirmed that she will announce a departure date in June whether her Brexit deal passes at the fourth attempt or not.
Traders were spooked by the prospect of Mrs May’s departure and another defeat for her deal putting the risk of a disorderly Brexit back on the table. RBC Capital Markets analyst Peter Schaffrik told clients that “a chain of events that leads to a new Brexit-supporting PM is not too far-fetched” as bookies placed Boris Johnson and Dominic Raab as frontrunners.
Sterling slipped as much as 0.7pc against the dollar at $1.2769, briefly touching at its lowest level since January. It is on its joint-longest losing streak versus the euro since its rival’s creation in 1999, sliding for a ninth day to an intraday low €1.1431.
Asia
Asian equity futures were mostly higher after U.S. stocks rose for a third day as investors shifted focus to strong earnings from Walmart and Cisco, which muted concerns about the trade war. Oil spiked on Iran concerns, while gold slumped.
Iran
Trump said he hopes the U.S. doesn’t go to war with Iran as House Speaker Nancy Pelosi warned him against doing so without congressional approval. The Iranian foreign minister said his country isn’t seeking a conflict but will defend its interests. Crude hit a two-week high after Saudi Arabia accused Tehran of aiding this week’s oil facilities attacks.
Fines
Citi, JPMorgan, Barclays, RBS and Mitsubishi UFJ were fined a total of 1.07 billion euros ($1.2 billion) by the EU for colluding on FX trading strategies in online chatrooms. Citi will pay the most at 310.8 million euros. UBS escaped a fine because it was the first to fess up. While relatively large, the cartel fines are lower than a 1.3 billion-euro penalty slapped on banks for rigging Euribor rates.
FTSE 100 Trading Signals, Forecast and Prediction
China’s state media reported that China potentially has no interest in furthering talks with the US right now; little sincerity seen by China in US President Trump’s approach.
For today I am thinking that the 7318 level will hold initially, as this is daily support and also just below the daily pivot. If it does then we could well be on for a decent rise towards the key daily resistance area at 7375 to 7380. Yesterdays high was also 7362 so the bulls might be keen to retest that. Should they really push on then 7412 is the next key daily resistance above that. I don’t think we will get that high today as the 380 area does look a decent shorting spot for the moment, however do bear it in mind.
For the bears, they will be keen to break below that 7318 initially. That opens up a trip down to the cam break out and round number at 7300, and then we start looking at the daily support which is at 7257 and the 200ema on the daily at 7232. Again I don’t think that we will get down to that lower support.
The 2 hour chart remains bullish for the moment, with decent support at 7291 but rising steeply at the moment. As such the 7300 level may well see some support if the 7318 level is broken. The 7318 to 7291 area does look like holding as support so entries around this range should work out.
Cross-party talks between Conservatives and Labour are near to drawing to a close without an agreement; focus now turns to Parliamentary voting options. Looking ahead to todays news releases, highlights include EZ CPI (Final), US University of Michigan Sentiment, Fed’s Clarida & Williams, BoJ’s Kuroda & ECB’s de Guindos
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