EBC Markets Briefing | Sterling down on report that Starmer could quit soon

Sterling inched down on Monday after US-Iran peace talks stretched into their second day in Switzerland. Shipping data showed the number of ships that passed through the waterway fell sharply on Sunday.

British PM Starmer was considering his political future, after rival Andy Burnham’s decisive election victory in parliament prompted more ministers in the governing Labour Party to call for him to step down.

Burnham’s political platform—often described as "Manchesterism"—focuses on devolving power away from Westminster, increasing public control of utilities, and boosting infrastructure investment.

Retail sales picked up in May and April's ​sharp drop was revised up as hot weather boosted sales of summer items like fans and paddling pools, suggesting households were shrugging off inflation concerns.

That stokes inflation fears after data showed CPI holding at 2.8% in May - slightly below forecast. Analysts said the timing of the Easter holiday this year may have contributed to rising fares.

The impact of increased energy prices will take time to fully reach downstream food and energy markets. Furthermore, a backlog of ships at the Strait of Hormuz threatens to prolong the recovery of global cargo logistics.

EBC Financial Group analyst said the pound was stabilising into a tight range around 1.3223. If the price breaks below 1.3160 on expanded volume, it will open the door for further downside toward psychological support levels.

Asset recap

As of market close on 18 June, among EBC major products, Intel shares led gains after Intel Foundry provided an update on its process roadmap and long-term innovation investments.

Accenture said it’s expecting to reel in less revenue in the coming months, as AI upends the consulting services industry and clients paused business due to the conflict in the Middle East.

US equity funds attracted a massive influx of capital in the week through 17 June, on hope for reopening of the Strait of Hormuz and fuelled strong investment in the technology sector.

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