Markets are in a much calmer mood to start the new week
The pound is holding steady as it trades higher to begin the week despite all the Brexit mayhem we have seen in the past week which culminated in Theresa May's resignation. Do be reminded that UK markets are closed today so a big chunk of liquidity will be taken out of European trading in the session ahead.
Meanwhile, the aussie is also inching higher alongside the kiwi as the risk mood is a slightly more optimistic with Asian equities trading higher. European equity futures are pointing to mild gains at the open so that is helping to apply some pressure the likes of the yen and swissie as we begin the morning.
But overall, the changes aren't too overwhelming so let's see what the session ahead will bring. European Parliament elections ended with notable upsets which favoured the likes of Salvini and Le Pen but they're not enough to really bring in any changes to the current political order but it is a sign that the tides are starting to shift in Europe.
Looking ahead, just be wary that this week we'll likely see month-end flows dominate trading sentiment for the most part so that perhaps could explain some of the early pound strength we're seeing currently. But yeah, just keep that in mind as the flows will likely make things a bit harder to read.
