Boris Johnson secured the Queen’s approval to suspend Parliament until her speech on 14 October, a mere two and a half weeks before the UK is due to leave the European Union.
The UK prime minister’s move will give his government time to “create the conditions for a Brexit deal” and present new policies in his “very exciting agenda”.
The decision sparked an angry backlash from MPs and opponents of a no-deal Brexit. In addition to protests across the country, a public petition gained over one million signatures within hours and a number of high-profile figures, including former PM John Major, threatened legal action against Johnson.
Sterling dipped immediately to 1.2170 against the Dollar as fears of a no-deal Brexit or a likely vote of no confidence as early as next week intensified, while EU sources suggested that the risk of no deal has now peaked.
In Asian trading, the Yen continued its advance, as record lows on US 30-year Treasury yields pegged back the Dollar, further underlining the dim outlook on the Sino-US trade war. The Japanese currency was up 0.3 per cent, having reached an overnight high of 106.23 as market participants moved towards risk-off sentiment.
In the meantime, the latest round of Trump’s tariffs is due to kick in on Sunday, 1 September. Washington announced an additional 5 per cent on $300 billion’s worth of Chinese imports. US retailers warned of price hikes yesterday and are bracing for job losses as a result of this latest move.
All markets are feeling ripple effects.
South Korea outlined its most aggressive spending plan in 10 years to bolster its weakening economy. The Australia and New Zealand Banking Group Limited (ANZ) Business Confidence survey showed both activity and confidence were weakening. The Chinese Yuan dropped to levels not seen since the 2008 financial crisis, trading at onshore 7.1663 and offshore at 7.1728 against the Dollar.
The Eurozone M3 Money Supply, measuring the change in the total quantity of domestic currency in circulation, grew from 4.5 per cent to 5.2 per cent year on year in July. This news should reduce pressure from the European Central Bank to consider monetary stimulus. Despite this reading, the single currency was unable to benefit and was restricted to below 1.1100 against the greenback.
Today, the US will release the latest GDP and unemployment claims data at 13:30 (BST).
US-Chinese trade war hurts Dollar
Germany, China to deliver stimulus to ward off recession
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