Both President Trump and Boris Johnson are threatening (or readying) for a no-deal with China and Brexit respectively. So two things you need to know if you're trading: 1) global indices are down across the board and 2) The British pound rises broadly on comments from Johnson and Labor’s efforts to a block a no-deal.
With regards to Trump, he announced that he's personally blocking a trade deal with China until Beijing returns to terms negotiated earlier in the year. “It's me right now that's holding up the deal” Trump said yesterday. Another important thing that augurs badly for markets: Trump threatened to raise tariffs on China if President Xi Jinping refuses to meet him at the upcoming Group of 20 summit in Japan. The last thing you'd want to do to a Chinese person is to threaten him publicly and corner him into possibly losing face. For an American leader to hint at humiliating China's head-of-state at the peak of his power in Japan of all places will surely backfire.
As for Boris Johnson, he unveiled his campaign for Prime Minister by saying that a no-deal Brexit outcome is not his aim. Meanwhile, Labor, backed by the Liberal Democrats and Scottish National party will set up a motion in a debate today aimed at seizing control of the parliamentary agenda on June 25 in order to preventing the future Prime Minister from suspending parliament to force through a disorderly exit against the wishes of Parliament. If this process advances successfully, all pledges by Tory leadership candidates to force through a no-deal exit on Oct. 31 would eventually fail, including the implicit readiness to prorogue Parliament (ending the Parliament session and pass on decisions to the Queen). The vote on this cross-party motion will be held at about 11:00 Eastern (16:00 BST) and could potentially be positive for the pound if it passes.
GBPUSD tests last week's three-week high of 1.3763 as it attempt to complete its first back-to-back weekly gain since March. A lot of work is yet needed for sterling bulls, but so far the foundation looks to be building up just fine. Our Premium long cable is currently +150 pips in the green.
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Ashraf Laidi recently talked about the Dollar, gold and the Chinese yuan Triangularity at TradersEXPO New York.
