“One in a million”. No this isn’t the start of an endearing love letter nor is it the title of the controversial song by Guns N’ Roses, the first of which Axel Rose wrote single-handedly. Indeed, it is the probability Boris Johnson assigned to a no-deal Brexit in last night’s online hustings with competitor Jeremy Hunt. The comment didn’t take many by surprise as it marked the first attempt by Boris to float towards the middle of the Tory party in order to vacuum up the neutral voters. Further attempts to block a no-deal exit are set to be voted on Tuesday next week. Legislation proposed by Conservative Dominic Grieve and Labour’s Margaret Beckett aims to block off funding for Whitehall departments in the event the UK leaves the EU without a deal and without Parliament’s approval. Yesterday, the pound ultimately sat flat with the data calendar remaining significantly light and joined the euro in the middle of the board. Today, the final debate between Boris Johnson and Jeremy Hunt was released and is scheduled a week before the results are announced. Both candidates will debate for 90 minutes at 19:00 BST on Monday, July 15th in the News Building by London Bridge and will be broadcast on the Sun’s social media platforms along with talkRADIO.


In the run-up of the vital inflation figures of today and tomorrow, the single currency found itself smack in the middle of yesterday’s G10 currency board. It remained quiet on Europe’s data front, with one notable data point being that 5-year inflation swap pricing has stabilised somewhat above record lows. Previously, the dramatic fall in the inflation swap worried members of the European Central Bank as it marked a reduction in inflation expectations. Also, yields on Italian 10-year government debt has continued to reside near last week’s 13-month low after the hints of more accommodative policies by the European Central Bank, and to a lesser extent, by the Federal Reserve. Today Flash German Consumer Price Index figures will be released per state throughout the morning, while Spanish Flash June reading came in half-way from the exuberant expectation, at a still high level of 0.4% month-on-month.


The greenback remained quiet like the eye of the storm as many interesting bits on pieces about trade prospects hit the wires throughout the day, while the US dollar remained mostly unmoved.South China Morning Post reported that a trade truce between the US and China is in the making, according to sources familiar with the situation. Still, US President Donald Trump threatened later that if no progress is made on trade at the G20 summit, that substantial additional tariffs would be added. This hawkish tone then contradicts with the words of Treasury Secretary Steve Mnuchin who said yesterday that a deal was “90% done” in March, and “there’s a path to complete this (…) with the right efforts”. The divergence in moods among many senior stakeholders involved indicates the optimism on both parties coming closer together may be overdone and chances of a sudden souring in risk sentiment loom. The moment to watch for now will be the meeting between Chinese President Xi and President Trump Saturday morning at 2:30 BST (11:30 local time) and potential statements to the press that may follow from this. Today at 13:30 sees the third and final Q1 Gross Domestic Product reading, which is expected to come in at 3.1% annualized again.


Another strong day for resource sensitive currencies such as AUD and NOK yesterday as the dollar generally softened. In crude markets, the weekly Department of Energy reports highlighted a further fall in inventories, building upon the positive surprise in the API report on Tuesday, and sent WTI up towards the $59 mark. The one-month high in crude prices comes before next week’s much anticipated OPEC+ meeting where allies look set to stick to their current strategy of limiting supply, however, further cuts in quotas could be forthcoming as supply worries due to middle-eastern tensions subdue. Today, the rally may stall for the loonie as geopolitics takes centre stage yet again in the run-up to the G20 meeting on Friday.