ohnson moved to suspend the UK parliament on Wednesday for around a month leading up to 14th October, a matter of just two weeks before Britain is scheduled to leave the European Union. The Prime Minister has stated that this still provides enough time for discussions on Brexit to take place in the House of Commons. It does, however, not take a political expert to see that the main rationale behind the decision is to limit the ability of opposition MPs to enact legislation that could block his attempts to force through a ‘no deal’ Brexit.

Politicians in the UK are set to return from their summer recess on 3rd September. Parliament will then be suspended at some point between 9-12th September, before returning on Monday 14th October. Unsurprisingly, this has been met with plenty of criticism from those strongly opposed to a ‘no deal’, notably from Labour leader Jeremy Corybn who has pledged to move for a vote of no confidence in the current government. Johnson’s majority of just one ensures that he could prove vulnerable to such a vote.

Should the no confidence motion actually pass, which we stress is probably unlikely at this stage, it has been suggested that Johnson could simply dissolve parliament and hold elections in early-November, effectively forcing a default Brexit. While uncertainty is high, investors are not yet in a full blown panic, with the pound managing to hold firm just below the 1.22 level this morning.

Euro creeps lower for fifth straight session

The EUR/USD rate has fallen in each of the past five London trading sessions, opening on Friday morning below the 1.105 level. The recurrence of a risk-off mode in financial markets has continued to support the safe-haven yen, swiss franc and US dollar. Investors have turned pretty pessimistic regarding a swift resolution to the US-China trade dispute in the past few days, albeit we did get some more conciliatory rhetoric out of China yesterday that opened the door to talks in September.

US growth data out on Thursday was left unrevised and the reaction in the currency market was pretty limited. Today will see the release of the US PCE inflation numbers, although we expect EUR/USD to be driven largely by trade concerns.