David Davies Resigns

UK Brexit Secretary David Davis and two other government ministers resigned overnight, just two days after the ‘soft’ Brexit agreement at Chequers.

In Mr Davis’s resignation letter, he argues that the agreement made it ‘less and less likely’ that the manifesto commitment to leave the Customs Union and the Single Market will be delivered.

Pro-Brexit ministers Gove and Johnson remain in the government. PM May is due to address the parliamentary party later today. A White Paper on the Brexit agreement is due to be published later this week, probably on Thursday or Friday.

The main event today is ECB President Draghi’s testimony to the European Parliament’s Economic and Monetary Affairs Committee 14:00BST.

His appearance follows the decision at the June policy meeting to stop the QE programme at the end of the year, but also to signal that interest rates would remain at current levels “at least through the summer of 2019”.

Last week, it was reported that some policymakers favour an earlier first rate rise than end-2019.

In the UK, we should get more insight later in the week, with Governor Carney (Wed) and Cunliffe (Fri) due to speak. There are no UK data releases, but tomorrow sees the inaugural release of monthly GDP (for May) which is expected to show improving momentum.

We expect to see volatility as the week goes on, please contact us for live markets updates and opinions on what to expect.

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