Gentium FX | Daily Report - 6th June 2022 - Prime Minister Johnson to Face No-Confidence Vote

Prime Minister Johnson will face a vote of no confidence today between 6-8pm. This follows as some Tory MPs have publicly displayed their anger over the Sue Gray report which detailed lockdown rules being broken at No.10. 54 Tory MPs have asked for the vote to be held, but 180 Tory MPs will need to vote against the Johnson if he is to stand down. Chancellor Sunak, Justice Secretary Raab and Brexit Minister Rees-Mogg have all announced their support for Johnson. However, the Pound seems to have brushed off these reports for now as even if there were a change in leadership it is unlikely that policies would change.

The focus for the Euro this week is the ECB meeting on Thursday. The market doesn’t believe that a rate hike is on the cards this month although it is expected that the ECB will increase rates by 25 basis points in both July and September after recent comments from Chief Economist Lane. Further comments by President Lagarde about the future path of interest rates, inflation and the Ukraine-Russia situation could create a volatile Euro.

Recent US economic figures has shown that there is good momentum behind the economy, although all eyes will be on Friday’s US consumer price inflation index data. This could show that inflation is peaking but it is unlikely that this will change the market’s interest rate expectations from the Federal Reserve. Overall, the Dollar has lost some ground against a stronger Pound and Euro.?