Sterling drops further as time runs out for the PM
|Heading into the close, the FTSE 100 is flat, outperforming a weaker day on Wall Street thanks to a slump in the pound.
- Treasury secretary steals the show
- Fed’s Rosengren still expects trade deal
- PM’s time almost up
Today’s US market action has, so far at least, hinged on a series of comments by the US Treasury secretary. Hints that tariffs may be delayed for time gave succour to the bulls, as did the suggestion that the US and Chinese presidents might meet each other in June at the G20 get-together. Overall however, markets are not getting the kind of conciliatory talk from either side that might suggest that progress is being made. Having been so badly caught out with hopes of a deal in late April, perhaps investors will be tougher to convince this time around. Interestingly, at least one FOMC member still expects a deal, with Rosengren saying that the two sides would read an accord, but that a revision to policy might be needed if a treaty were not forthcoming. This acknowledgement that the Fed is carefully monitoring the situation is welcome, but again investors will want to see deeds, not words.
If rumour is to be believed, Theresa May might not even last in power long enough to get Parliament to vote again on her deal. We have had plenty of rumours about plots in the last few months, but a rebellion among mid-level cabinet ministers, and suggestions of senior members going in for ‘chats’ with the PM seem to point to a growing desire for change. Sterling continues to plummet, losing the $1.27 level again today on fears a Boris premiership is now much closer.
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