Good morning everyone. It was Nelson Mandela day yesterday - the great man would have turned 100 years old. To celebrate the occasion, and in so doing honour the man who opened our HQ in Johannesburg many years ago, Investec put on a grand South African feast for staff at our new London HQ, 30 Gresham Street. Needless to say, I binged like a man who’d not eaten in years. There’s a saying in Africa – you can take the boy out of Africa, but you can never take the Africa out of the boy! Those words certainly rang true as I made a very large dent in the canteen’s bobotie pot! Today I will try my luck at eating as little as possible to make up. Wish me luck. Markets can also have behave in a ‘feast or famine’ manner, and with GBPUSD plummeting to a new 2018 low yesterday it remains to be seen if we kick on back into the 1.20s, or if Cable pauses for breath.

As we all know UK political uncertainty has certainly weighed heavily on the Pound this week. Adding to Sterling’s woes were the June inflation numbers, released yesterday morning, which showed headline CPI inflation holding steady at 2.4%, against market expectations of a rise to 2.6%, with downward influences coming from clothing and footwear, as well as recreation and culture, in particular computer games. Weaker than expected readings were also seen across the other inflation measures, with ‘core’ CPI falling back to 1.9% from 2.1% and CPIH holding steady at 2.3% (consensus 2.5%). Overall a softer set of inflation readings than expected, also pushed gilt yields lower, with the 10yr yield falling 4bp to 1.23%.

As for the day ahead, there are a few key releases today to keep an eye out for and it has potential to be another very interesting day. At 09.30 we have the UK Retail Sales release to digest. If Retail Sales undershoots significantly we could be in a déjà vu scenario with the August 2nd rate hike, being placed in major doubt. This is exactly what happened in April ahead of the May rate announcement. Expectations are for the Retail Sales year on year numbers (including auto fuel prices) to have dropped to 3.5% from 3.9% previously. Other notable releases to watch out for include the Philadelphia Fed Business Outlook and US Jobless Claims at 13.30.

On the Brexit front, today we will see the new Brexit secretary Dominic Raab hold his first talks with the EU's lead negotiator, Michel Barnier, in Brussels later with the meeting coinciding with the European Commission instructing other EU states to prepare for a no-deal Brexit. Raab is also reportedly stepping up plans to release more advice to businesses on a ‘no deal’ outcome, in an effort to make this appear like a credible alternative in Brexit talks.

In other news, the Australian economy added 50.9k new jobs, considerably ahead of the 16.5k median analyst forecast. Importantly, most of the increase came from full-time jobs (+41.2k), with 9.7k part-time position making up the rest of the gains. This very upbeat local job data for the month of June, which showed that employment jumped 3 times forecasts caused GBPAUD to dip back into the 1.75s, however we have retraced back into the 1.76s in early  trade this morning.

Good luck trading today folks, I’d suggest you keep close to your FX dealer today. A few currency pairs like Cable are sitting on key support levels, so USD buyers better keep fingers crossed for a strong Retail Sales numbers coupled with calmness and solidarity on the Political scene.

Today sees the start of the 147th British Open at Carnoustie. Players from around the world will be competing for the famous claret jug which dates back to 1872, the prize money of $10.5m also serves as an extra incentive. Carnoustie is often referred to as Car-nasty by some American players due to its famous difficulty, especially under adverse weather conditions. Carnousitie is perhaps most famous for the collapse of French golfer Jean Van de Velde who only needed a double bogey on the final hole to win the Championship. He proceeded to triple bogey and lost the following play off to Scot Paul Lowrie. If you would like to discuss the recent collapse of the pound in more detail please call the Investec Dealing Desk on 0800 055 6339.