The UK's political instability stems from the stagnant decline since Brexit, leading to fragmented politics and a volatile situation where the Labour Party won a majority with a low vote share.

The shift from strong two-party politics to multiple parties (Lib Dems, Reform, Greens) vying for power, combined with a first-past-the-post system, has created this volatility.

The upcoming Trump-Xi summit is likely to produce some CEO-level deal announcements, but for broader markets like rates and FX, it will probably be a 'nothing burger' as major geopolitical positions on Taiwan and Iran are unlikely to change.

Trump's previous summits with leaders like Putin have not resulted in market-moving outcomes for rates and FX.

Japan's intervention has been successful in the short term, moving USD/JPY from 160 to 155, but the Ministry of Finance is 'leaning against the wind' as rising oil prices weaken the yen, requiring either further intervention, a BOJ hike, or lower oil prices to sustain the effect.

The slow creep higher in USD/JPY between interventions means the MOF must keep intervening or the BOJ needs to hike rates.