Collinsonfx Daily Market Commentary

Political turmoil in Britain continued to escalate out of control. The UK Parliament has upended tradition and derailed the Conservative Government and its control over the power to Govern. The Opposition and Tory rebels combined to take control over Parliament. They are now working to pass a bill ensuring the Government cannot Brexit the EU with 'No Deal'. Rules also prevent the UK PM Boris Johnson from calling a snap election. This is pandemonium on a grand scale and is the worst political crises since WW2. The Parliament continues to defy the will of the people of the UK and the referendum to leave the EU. The crises has sent the currency into extreme state of flux. The prospect of a 'No Deal Brexit' sent the currency plunging to 2016 lows, but the Parliamentary action has seen the GBP jump to over 1.2200, supported by the Bank of England report that lowered the scale the damage to the UK economy of a 'No Deal Brexit'. Expect the chaos to continue as the people fight the parliament.

The US Dollar continued to ease, with the EUR jumping back above 1.1000, despite the threat Brexit poses to the EU experiment. Global equity markets surged on some positive news from Hong Kong. The Hong Kong Government relented and withdrew the Extradition Bill, that triggered the tumultuous political upheaval experienced in the autonomous zone in recent times. Markets recovered and await the release of the Fed's Biege Book, which will tell a tale of economic progress in the US.

Australian GDP numbers were weak, coming in at 1.4% for the second quarter, but in line with expectations. This allowed the doomsday predictions to be dismissed and with the help of a flagging reserve, allowed the currency to surge. The AUD spiked back toward 0.6800, while the NZD rebounded to 0.6350, despite the disruptive economic and political news. Brexit chaos continues and we can expect some more speculation on the US/China trade talks, which will continue to be the primary macro driver of global markets.