GBP tumbles as Theresa May sets date for final showdown

The pound is on the slide after Theresa May agreed to leave if her deal was rejected in June. Meanwhile, the US measures aimed at hurting Huawei have done little to dent positive market sentiment.  

• GBP tumbles, as Theresa May looks set to leave in June
• China expected to retaliate after US targets Huawei
• Burberry continues to struggle amid weak Asian demand 

Sterling declines have helped drive the FTSE 100 higher today, as the end of Theresa May’s leadership begins to look increasingly close. Talks between the PM and her colleagues in the 1922 committee have never been easy for May, yet her grip on the leadership appears to be slipping after she agreed to leave the role if she loses her next vote in June. For markets this is ramping up the likeliness of a hard Brexit, as pushes for a more hardline Brexiteer to take over is raising fears that we could see the UK leave the EU without a deal in October. Today’s decision will drive a wedge between those who seek a hardline Brexit and everyone else, for moderates will know that a new conservative leader could lead the country out of the EU irrespective of whether a deal is in place. 

Global markets are on the rise today, as fears over a breakdown in trade talks between the US and China took a back foot. Interestingly today’s gains have come despite the US decision to declare a state of emergency in a move that is seen to take aim at Chinese telecoms giant Huawei. While Chinese authorities are expected to retaliate, we are seeing limited repercussions, with Apple and 3M providing two of the only three losers on the Dow today. 

The Burberry turnaround plan is clearly not going to plan quite yet, as the sales growth and adjusted profits fell amid a slowdown in Asian demand. Hopes over a positive impact from a new range designed by Riccardo Tisci have been tempered for now, with the double digit rise in sales of the range having limited effect given that they only make up 10-15% of the stock on offer.