EUR/GBP, GBP/USD flows: Better Q1 GDP old news, more leadership positioning
Rayner announces HMRC 'all clear' ready to enter the fray, still waiting on the kick off
Mar GDP better end to UK Q1 but Q2 seen flagging
Risk rally and key US yields levels provide the broader backdrop
Very quiet overnight. Event risk still comes in the form of the ongoing Trump-Xi meeting and the mooted UK leadership challenge. On the latter front, Angela Rayner claims to have been cleared by HMRC over ‘deliberately seeking to avoid tax’ over the underpaid stamp duty, signalling readiness to throw her hat in the ring. As the backdrop to this, and of course the Iran war, UK GDP out this morning did still show a decent enough end to Q1, with March at 0.3% (mkt 0.2%) and 1.1%y/y (mkt 0.8%), coming in at 0.6%q/q as expected. That is now expected to give way to a more stagnant or corrective Q2 though. In terms of price action, cable still sits just off the 1.35 level it tested yesterday and EUR/GBP just off the 0.8695 (GBP/EUR 1.5) to 0.87 resistance tested at the reaction highs seen to date.
The broader backdrop remains one of US and tech resilience for now, albeit some increased daily volatility this week on the steep upmoves, and US yields sitting at the key reference areas (2s 4%- and 30s nudging 5% and last summer highs through).