Talking Points
- The UK’s Brexit minister warns the UK will walk away from the Brexit talks if the EU fails to compromise.
- The latest opinion polls show a narrowing lead for the ruling Conservatives over Labour.
- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.
The British Pound was clinging close to the $1.30 level Monday despite a warning from the UK’s Brexit Minister David Davis that the UK would walk away from the Brexit talks with the EU unless the EU compromises on the €100 billion bill it is demanding from the UK to pay for the divorce.
It also shrugged off a sharp narrowing in the opinion polls for the ruling Conservatives over the opposition Labour Party ahead of the UK General Election on June 8. Four recent polls have shown the lead down to between 9% and 12%, from 20% little more than a week ago.
In early European trading Monday, GBP/USD fell below the psychologically important 1.30 mark but then rallied.
Chart: GBP/USD Five-Minute Timeframe (May 22 Intraday)
Speaking to The Sunday Times newspaper, Davis said: “We don't need to just look like we can walk away, we need to be able to walk away… Under the circumstances, if that was necessary, we would be in a position to do it.” As for the polls, the latest show the Conservatives on 43%-46% and Labour on 34%-35% after UK Prime Minister Theresa May said the elderly would have to pay their social-care costs – a change dubbed a “dementia tax” by her opponents. On Monday, she appeared to climb down from the proposal.
Euro-Zone finance ministers are due to meet in Brussels today and a meeting of all EU finance ministers will take place tomorrow but aid for Greece will likely top the agenda rather than Brexit.
Markets
| Index / Exchange Rate | Change (Exchange Hours/GMT Session Rollover) | Market Close/Last |
|---|---|---|
| FTSE 100 | +0.41% | 7,506 |
| DAX | -0.41% | 12,587 |
| GBP/USD | -0.28% | 1.2999 |
| EUR/USD | +0.19% | 1.1229 |
| EUR/GBP | +0.49% | 0.8638 |
Upcoming UK Event Risk
| Events | Date, Time (GMT) | Forecast | Previous |
|---|---|---|---|
| UK Public Finances (PSNCR) (Pounds) (Apr) | May 23, 0830 | 34.3b | |
| UK Central Government NCR (Apr) | May 23, 0830 | 18.3b | |
| UK PSNB (Pounds) (Apr) | May 23, 0830 | 8.0b | 4.4b |
| UK PSNB Ex Banking Groups | May 23, 0830 | 8.8b | 5.1b |
| UK CBI Retailing Reported Sales | May 23, 1000 | 10 | 38 |
| UK CBI Total Distributed Reported Sales | May 23, 1000 | 31 | 44 |
--- Written by Martin Essex, Analyst and Editor
To contact Martin, email him at martin.essex@ig.com
Follow Martin on Twitter @MartinSEssex
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