UK members of Parliament (MPs) yesterday, 12 June rejected a Labour Party effort to take control of Parliament’s timetable in an attempt to block a no-deal Brexit, voting 309 to 298. If the bill had passed, it would have given no-deal opponents the chance to table legislation that would have taken the option off the negotiating table with the European Union. That way the UK couldn’t leave on 31 October without an agreement in place.
The news came after Boris Johnson officially launched his Conservative Party leadership campaign, saying he was “not aiming for a no-deal outcome”, but it was a “vital” negotiation tool. He also said the UK “must do better” than the current deal. Johnson’s leadership announcement caused the Pound to rise against the Euro and the Dollar as it became clear that his stance was softer than most anticipated. However, the MPs’ decision to reject the Labour no-deal Brexit bill hit Sterling, which lost the earlier gains and more, leaving it below 1.2700 against the Dollar and below 1.1250 against the Euro once again.
Meanwhile, US Consumer Price Index (CPI) inflation data came in weaker than expected, having risen by 2 per cent against the forecast of 2.1. The release follows the trend of slowing economic growth in the US as a result of ongoing trade tensions with China. But it also bolstered expectations of an interest rate cut this year, with the Fed funds futures now indicating a quarter-point cut could come as soon as July.
In a relatively data-light day, market participants will look for direction from the first round of voting in the Tory leadership race election.
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