ECB Nears Easing, Johnson Hardens Stance
Euro drops sharply on the ECB's announcement that it will consider a tiered system for reserves, which means that further rate cuts and new round of QE are imminent. We will get more details in Draghi's press conference coming up in 15 mins from now. More on UK PM Boris Johnson below. A new Premium EUR trade issued with 2 supporting charts.
Although there were no surprises from an ECB rate action today, all eyes turn to September once the new forecasts are out. Until then, odds will be clearer by the end of today's press conference. We now await to what extent will Draghi offer extra dovish signals and whether the euro will come up in the discussion.
Boris Johnson Goes on all inBoris Johnson took his first actions as Prime Minister on Wednesday, saying he will take the UK out of the EU, “no ifs, ands or buts”. He named Raab as his foreign secretary, Gove as Chancellor of the Duchy (essentially the cabinet boss) and Javid as Chancellor of the Exchequer.
May tried to build a compromise cabinet but Johnson is surrounding himself with like-minded thinkers. It also highlights that his main priority is Brexit. The thinking may be that only the hardliners will be able to push through a compromise because Johnson has given them plum jobs and the opportunity to govern. At the same time, it may be hard for them to credibly vote for tweaks to the declaration on the new relationship while leaving the withdrawal agreement unchanged.
Ashraf tells me he sees the likelihood for a new UK General Election before year-end at 60%, especially if the Conservatives lose a seat in the upcoming by-election in brecon and radnorshire.
|Eurozone ECB Press Conference|
|Jul 25 12:30|
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