The British pound has moved little to the unsurprising announcement of Boris Johnson’s election as head of the British Conservative Party. The currency weakened to $1.244 against the recurring fears of a Brexit without agreement.
The dollar takes 0.40% to 97.65 points, against a basket of reference currencies, including the euro which fell to 1.116, a low since early June, two days from the meeting of the ECB.
In the commodities segment, a barrel of WTI crude advanced 0.50% to 56.50 dollars, while tensions remain palpable in the Middle East. The United Kingdom could freeze Iran’s assets following Iran’s seizure of a British-flagged oil tanker in the Strait of Hormuz on Friday – a hot case that Boris Johnson will have to take on board in addition to the thorny Brexit.
On the economic front The FHFA real estate price index for the month of May rose by 0.1% in comparison with the previous month, against a consensus of +0.3 % and a gain of +0.4% reported a month before. The increase is +5% year-on-year.
According to the US National Association of Realtors (NAR) on Tuesday, the re sales of existing homes for the month of June 2019 amounted to 5.27 million units, against 5.32 million consensus and 5.36 million for the revised reading – up slightly – from the previous month. As a result, home re sales fell 1.7% from the previous month and 2.2% year-on-year.
The Richmond Fed regional manufacturing index for July 2019 was negative territory at -12, while the consensus was +5. The indicator was +3 a month ago. The July index therefore reflects a sharp correction in manufacturing activity in the region.
Markets will watch the announcements of the European Central Bank the day after tomorrow, which should prepare operators for future easing. Regarding the Fed, the expectations are rather those of a fall of the rates of a quarter of a point at the end of the meeting of July 30 and 31.