ollowing five rounds of voting, former London Mayor Boris Johnson and current Foreign Secretary Jeremy Hunt emerged as the two leading candidates, with pro-Brexiter Johnson comfortably coming out on top in the final vote. The margin of victory, in the end, was not even close, with Johnson obtaining almost twice as many votes as his competitor.

With Johnson the most vocal in his openness to a ‘no deal’ Brexit, Sterling has been on a fairly sharp downward trend in the past few weeks as markets grew increasingly assured of his victory. While his appointment, announced at around midday today, was heavily priced in, confirmation sent the Pound modestly lower this morning.

His immediate mandate will, of course, be trying to force a Brexit deal through parliament. There have been reports that the EU are open to another delay to the 31st October deadline. Yet, with Johnson adamant that the UK will leave the bloc come what may at that date, he will need to find a solution that enables a withdrawal agreement to pass in a House of Commons vote. We are increasingly of the opinion that this will require a general election.

Fed’s Rosengren states US rate cut not required

Some relatively upbeat comments from Federal Reserve member Rosengren helped lift the US Dollar to a near two month high against the Euro this morning, fairly remarkable given the sky high expectations for US rate cuts.

Rosengren suggested that she was not in support of an imminent interest rate cut, saying that the US economy was strong and that easing would not be required. Given that Rosengren is a voting member on the FOMC her comments are pretty significant. That being said, she remains a bit of an outlier and it appears that even if she were to vote for stable rates next week, there would be enough support among the committee for an immediate cut.

Data is relatively light on the ground in the currency markets this week, with most of the attention on the next UK PM announcement. US housing data out this morning could prove a market mover if it materially deviates from consensus.