Boris Johnson will meet the Queen later today and become United Kingdom’s Prime Minister after securing two thirds of Conservative Party members’ votes defeating Foreign Secretary Jeremy Hunt. Theresa May is expected to resign after today’s parliament session. Johnson won on a platform of delivering Brexit by October 31 and will later today announce his cabinet. Meanwhile, the opposition leader, Jeremy Corbyn will hold a protest asking for a general election saying that the Prime Minister should have the support of the British people and not fewer than 100.000 members of his own party. Johnson was praised last night by US President Trump who said that he liked him, they are both different and that he expected the two to have a very good relationship.
Progress in the US-Sino trade dispute gave Asian shares a boost while the dollar hit two-month highs on the euro ahead of the European Central Bank’s coming policy meeting. Sentiment had been helped by a report that U.S. Trade Representative Robert Lighthizer would travel to Shanghai for meetings with Chinese trade officials. Japan's Nikkei gained 0.5% on the news, while Australian stocks reached 12-year highs. MSCI was up 0.4% and Chinese blue chips CSI300 climbed 1.2%. Nasdaq did not capitalise on the news falling 0.2%, the Dow ended up 0.65%, while the S&P 500 edged 0.68%.
The dollar got a boost following the budget deal in the US, while the euro suffered as investors are expect the ECB to take a more dovish turn. The European single currency approached two-month lows at $1.1144 and hit a near seven-month trough on the yen at 120.45 The dollar on the other hand edged up on the yen to 108.23. Against a basket of currencies, the dollar index placed itself on a five-week top. Sterling was at $1.2433 having fallen for three consecutive sessions. Gold returned to climbing at $1,421.76 having lost ground after last week’s peak at $1,452.60.
South Korea protested against a Japanese plan to remove it from a list of favourite countries that face minimum trade restrictions. Officials said the move would undermine decades-old economic and security cooperation and threaten free trade. Japan’s planned revision is a further escalation of row over compensation for wartime forced labour. Japan tightened exports to South Korea of high-tech materials used for making memory chips and display panels. Its top government spokesman said relations with South Korea were in a “very severe” state and Japan would continue to urge South Korea to take appropriate action over a string of issues that have frayed ties. South Korea officials are expected to raise the matter in talks with U.S. national security adviser John Bolton who is currently in Seoul.