Foreign Secretary Boris Johnson Quits

Weekly Report - 16/07/2018

Political Turmoil


Brexit news dominated the first half of this week’s headlines in our space, with Monday’s resignation of UK Foreign Secretary Boris Johnson as well as Brexit Secretary David Davis, which consequently negatively impacted the pound.

The Week that was

To make matters worse for the pound, US President Trump, who was visiting the UK at the end of last week, undermined British Prime Minister Theresa May by saying that Boris Johnson “would be a great prime minister” and that the US trade deal would probably be killed if the soft Brexit proposal went ahead.

Last week was also dominated by tariff and trade war-related headlines based on news that the US is about to release a new tariff list for Chinese goods worth $200 billion.  The announcement weighed heavily on the Australian dollar. The US dollar had a strong week especially against the Japanese yen due to Fed rate hike expectations. US equity markets were up, and the Nasdaq hit a new record high, while Facebook and Amazon scaled all-time highs.


Main Focus This Week

This week’s economic calendar has quite a few important events. There will be a summit between Trump and Putin in Helsinki on Monday. Investors will focus on earnings announcements as earnings season continues with reports due from companies including: Bank of America, BlackRock, Goldman Sachs, Morgan Stanley, American Express, Netflix, Microsoft, Taiwan Semiconductor Manufacturing, Unilever, Johnson & Johnson and IBM. Federal Reserve Chief Jerome Powell delivers the semi-annual Monetary Policy Report to the Senate Banking Committee and answers lawmakers’ questions. In terms of economic data, the UK will be in focus as there will be a string of data out this week, including the employment report, CPI and retail sales.


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