Trade wars

Theresa May is set to take over as UK Prime Minister today and the pound continues to regain lost ground against a number of peers on optimism of re found political stability ahead of Brexit talks with the European Union. Uncertainty remains in the foreground of market sentiment however, and the sterling depreciation is possibly far from over until more concrete information is known on how May will tackle such talks.

The Bank of England in fact is due to decrease interest rates by 25 basis points tomorrow as it tries to support and protect the British economy from negative impacts due to Brexit uncertainty.

The Eurozone, meanwhile, is fairly gaining market sentiment back, and was boosted yesterday with Italian banks rallying on Renzi’s announcement that an agreement with Europe was in the pipeline in supporting the Italian banking sector suffering from the burden of non-performing loans.

All is alive and kicking in the US this week, with the S&P 500 yesterday reaching its all-time high on continued confidence of an economic recovery and supportive unemployment claims and non-farm payrolls data that exceeded consensus expectations. Left to see, whether economists will revise Fed...