UK: May cabinet reshuffle to fuel some noise, but little fundamental fallout - ING

Talk of a wholesale reshuffle within PM Theresa May’s cabinet will dominate the UK’s domestic agenda this week – especially given the lack of key UK data catalysts and potential new Brexit developments, according to Viraj Patel, Research Analyst at ING.

Key Quotes

“While in the political sphere, reshuffles hold the equivalent entertainment value of ‘eviction days’ in a popular reality TV show – any fundamental fallout for the pound seems unlikely from the PM’s team tinkering this week. Key ministers like Chancellor Philip Hammond, Brexit Minister David Davis and Foreign Secretary Boris Johnson are expected to retain their posts – while one should also not read too much into the appointment of a new minister responsible for managing Brexit ‘No Deal’ contingency plans.”

“Any GBP/USD pullback towards 1.3400/50 should be seen as a buying opportunity given our 1.40 1Q18 target. EUR/GBP to stay within the narrow 0.88-0.89 range.”