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
European Interest Rates More momentum on rate cuts in the Eurozone as expectations grew for cuts starting in March and totalling 140bps in 2024. Equally in the UK cuts of 130bps starting in June are being pencilled in to market calendars. What this means is that GBP/EUR is looking more than especially good value at […]
I’m a central banker, get me out of here Ant and Dec were not present at the RBA decision overnight. However, based upon the reception of the decision, Governor Michele Bullock might rightly feel she was in one of the duo’s trials. Markets offered a frosty reception to the Reserve Bank of Australia’s latest interest […]
UK With 2 year mortgage rates less than 4% and 5 years at 4.39%, the implication for the housing market which has responded by a modest 0.2% rise, is that rates are soon going to fall and that the UK economy is stabilising. While there will doubtless be setbacks to this rose tinted scenario, for […]