Europe higher but major events lie ahead
Europe is off to a decent start although I don’t think we can read too much into early week gains given the vast majority of the major market events will come over the next few days, and even into next week if you include the Fed announcement, after which summer may unofficially properly start.
Of course, the new UK PM will be announced around lunchtime today which is clearly a hugely important event but with Boris Johnson such a clear favourite, markets may not be as responsive as you would maybe expect, with much of his negative points – most notably his views on no-deal – being priced in.
Of course, we’ve had many shocks in recent years, could Hunt be the next? This could be a big shock for markets but arguably a positive one for sterling given Hunt’s past remain bias and opposition to no-deal.
Of course, he hasn’t rejected it altogether and has claimed the backstop is dead but he’s arguably seen as being far more moderate than his opponent.
