• Gold down $8 to $1841
  • WTI crude oil down 77-cents to $118.11
  • S&P 500 up 13 points to 4121
  • US 10-year yields up 8.5 bps to 3.04%
  • GBP leads, JPY lags

The Boris Johnson vote was a day-long distraction. The betting markets were showing it as a non-event but 41% of MPs voted against Johnson, leaving him bruised despite the win. For reference, Theresa May survived despite 37% voting against her but she resigned a few months later. When there's blood in the water, UK politicians are ruthless but by rule he now can't be challenged for a year.

Perhaps the most-notable news associated with it is that Johnson told MPs in a meeting he would offer a new economic package next week and deliver a tax cut in the year ahead. Adding a tax cut to an inflationary economy could force the BOE to hike further and could also boost growth. That may explain the strength in GBP today.

Aside from the pound, it was all about US dollar strength today. In particular, it broke the May high against the yen and touched the best levels since 2002. The rally was non-existent until early in US trading when Treasury yields began to tick up. That trend continued throughout the day with 10s climbing back above 3%.

There was a brief bounce in EUR/USD into the London fix but it was short-lived as dollar strength overwhelmed everything and the euro fell through 1.0700.

As the dollar gained ground and yields rose, a strong day for equities was sapped. That weighed on commodities and commodity currencies as well. CAD was strong at the outset on $120 oil and gas above $9 but gave most of it back.

AUD is in focus in the day ahead with the RBA decision coming up. The market is pricing in 28 bps of hiking so that's a 3/25 chance of 50 bps but enough to make some people nervous.

FX news wrap