UK Lock-down Adjustments Coming
Boris Johnson’s return to office this week, following two weeks of recovery from COVID-19, during which time Dominic Raab deputised for him, marks a significant step in the UK’s journey back from the depths of lock-down hell. Despite the UK officially being under stay-at-home orders until May 7th, there has been growing pressure both from the public and within parliament to ease the restrictions which have heavily damaged the UK economy.
In Johnson’s first two speeches back as PM this week he has confirmed that he will be announcing changes to the lock-down restrictions within “the coming days”. While the stay-at-home order is likely to remain in place, other aspects of the lock-down are expected to be lifted, including the re-opening of many shops selling “non-essential” items, such as clothing retailers and garden centres.
Johnson Warns Against Second Spike
However, the PM was clear in his warning that the core lock-down measures, the stay-at-home orders, would not be eased too soon and that doing so would risk a dangerous second outbreak of the virus which would be an “economic disaster”. However, the PM’s message was mostly upbeat with Johnson noting that there are “real signs now that we are passing through the peak” – referring to receding numbers of new infections and a decreasing death toll.
The PM’s message was tinged with the weight of his recent struggle with COVID-19 as he told the public: “If this virus were a physical assailant, an unexpected and invisible mugger – which I can tell you from personal experience, it is – then this is the moment when we have begun together to wrestle it to the floor… the moment when we can press home our advantage”.
Brexit Trade Talks In Peril
With Johnson back in No. 10, focus is now shifting back to the flailing Brexit trade talks. Johnson had previously outlined, ahead of the virus outbreak, that without a robust outline of a deal by June, the UK would walk away from the talks. Many UK media sources are now reporting that Johnson has been advised that talks are on course to fail and, in an effort to help bolster the negotiations, he is expected to talk with the EC president this week to push for the talks to be given more structure and focus.
However, with many contentious issues remaining (such as EU access to British fishing waters) the prospect of agreeing an outline for a deal over the next month appears incredibly limited and there is speculation that the PM will be forced to extend the transition phase deadline beyond December 31st, which he vowed he would not do.
GBPCAD ( Bullish above 1.7349)
From a technical viewpoint. GBPCAD has been correcting lower with the bearish channel from April highs (1.7696), supported by the monthly pivot at 1.7349. For now, price is hovering around VWAP, towards the upper end of the channel which, if broken will turn focus onto the 1.7696 region next.
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