Foster’s Terror:
Yesterday’s Sterling market faced a headwind as investors realised they might have over stepped, in fact overpriced, the potential benefits of a post-Brexit trading arrangement at the European level. The value that markets have priced out during the course of yesterday and today reflect investors’ and traders’ concerns that getting a deal from the European Union is just the first hurdle; it’s got to float across the channel! The composition of the House of Commons at present is fragile. Without even considering the imposition and constraint that the upper House of Lords can place upon the legislative arm, the Conservative ‘majority’ and working alliance is weak at best. The DUP, headed up by Arlene Foster, holds a working agreement with the incumbent Conservative Party leadership in order to give PM May and the Cabinet command of the lower house. Ms Foster, however, has signalled that the Northern Irish party will not just roll over and play dead if its interests, and the interests of Northern Ireland, are not satisfactorily represented in the hypothetical deal. Crashing the Pound by 0.55% against the Euro and 0.4% against a similarly struggling Dollar. In Europe, regional growth (or rather a lack there of) is drawing back into focus. In the minutes from the ECB’s latest policy statement relenting growth was clearly within the monetary policy authority’s radar. A resolution of political risk in Turkey with the release of US pastor Andrew Brunson saw traders exhibit a classic “sell-the-news” fallout. With the Lira rallying to and past 6.0 to the Dollar in the past weeks amid speculation of the resolution, today’s confirmation counterintuitively saw the Lira lose value.
Since Market Open:
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Data Day Despite salient data already having been published in China and France so far this morning, we are far from finished with the deluge of data due to reach the market today. The most important of which will be those that we have signposted in earlier briefings: Eurozone and US inflation figures. Given just […]
Eurozone That was a surprise: yesterday the EU announced that inflation had fallen to 2.4% which was considerably better than the 2.7% that markets had expected. Despite the ECB saying it was far too early to cut rates, the market has pencilled in the first cut for April. Before getting carried away it should be […]
UK Labour market The Bank of England yesterday broke cover to drive the message home that due to the UK’s labour market remaining tight, it was premature to start talking interest rate cuts and it was not just Governor Bailey who was calling for higher for longer interest rates but also his MEPC colleague Jonathan […]