TGIF:
This week has closed with a bang. A Federal Open Market Committee decision last night, more Brexit news than you can shake a stick at and a Euro that just can’t make up its mind all added to the confusion. This morning, DUP leader Arlene Foster kicked Sterling markets into a spiral with the Pound soon trading below 1.30 against the Dollar. Pushing the losses within cable to a little over 1.5 percent in 48 hours, the leader of the Northern Irish party said that May could not count on her party’s support on the incumbent Brexit deal. The Northern Irish politician slammed May’s Brexit plan, as a move against the Union and a danger to the stability of the United Kingdom. The move was less pronounced against an already subdued Euro, allowing EURGBP to continue its descent through 0.87. The Fed’s interest rate decision last night left the US Dollar virtually unchanged. Ahead of the event, futures markets attached an 80% probability of a 25-basis point interest rate hike at their December meeting. Following the event, the situation and market expectations remained almost entirely unchanged. Unsurprisingly, therefore, treasury yields were little changed with the US and Asian session last night leaving the value of the US Dollar unchanged. At market open in Europe this morning, there was a different story, with the greenback closing some 0.4% stronger than its rate at market open this morning. Moving into the weekend, any development on Brexit will continue to determine the Pound’s value.
Discussion and Analysis by Charles Porter
a C and a P, PI Two price indices have been released within the US this week. That released on Tuesday covered the change in prices at the producer level. On Wednesday, it was markets’ turn to look at consumer price levels. Only one of the price level readings had a meaningful impact upon markets. […]
Japanese Yen As soon as a rash of market analysts concluded yesterday that the Yen was a basket case and that the Bank of Japan were wasting their money intervening to prop up the Yen, the Japanese Yen strengthened markedly on the back of US data admittedly rather than positive Japan data, but it certainly […]
UK Pay With unemployment at its highest since last year with the Q1 rate at 4.3%, it would look safe to assume that the Bank of England would be encouraged to cut UK interest rates sooner rather than later; however with wage growth at 6% providing the counter argument to sooner, the first cut may […]