Adopting a V shaped trade throughout the day, Sterling largely parred the gains that it had enjoyed throughout overnight Asian and early European trading this morning. By midday, the Pound had lost more than 1% of the gains it had made during the overnight sessions following the technical agreement of the Northern Irish backstop agreement. However, as markets began to orientate themselves around May’s Cabinet meeting this afternoon and react to the Prime Minister’s attitude and words during her appearance in the Commons this afternoon, Sterling began to rally once again. Given the lack of resignations during the reading period of the technical agreement agreed in Brussels yesterday, Sterling traders remain optimistic for May’s forthcoming statement outside of Number 10. The speech had been expected to take place around 5pm, however, will little sign of resolution within the Cabinet meeting thus far, it is likely that her appearance will be delayed for up to two hours. Fallout will therefore be measured within the New York and Asian sessions, with European able to have their say tomorrow. Yesterday’s deadline for a reformed budget proposal from the Italian coalition to the European Commission has come and gone, without a package of resolution. The burden now lies upon the European institution to either invoke the excessive deficit procedure, punitively approaching the fiscally irresponsible state, or, pursue a more conciliatory tone. Consumer Price Index data within the United Kingdom came in flat this morning, with annualised and month on month inflation underwhelming consensus expectations. The weak data still showed above-target inflation, however, at 0.1% below expectations, the data undermined the confidence in the need to normalise monetary policy should a stable Brexit be achieved.
Discussion and Analysis by Charles Porter
UK Energy Apart from announcing that there will be no further North Sea drilling licences issued, newly minted Uk Energy Minister Ed Miliband has wasted no time in greenlighting three huge new solar farms in Lincolnshire, Cambridgeshire and Suffolk. Sufficient to power 400,000 homes with an output of 1.4 GW the solar farms will cover […]
Germany The German business climate was slated to rise in July but instead it fell in terms of both current and also future expected business conditions as reflected in the IFO Index made up of manufacturing, services, trade and construction sectors as submitted by 9000 firms. Germans wishing doubtlessly that they could be as strongly […]
British Pound GBP is currently in fashion: with a record number of long positions and currently at the top of the G7 currency performance charts and after a period of being deeply unfashionable GBP is wanted-in a good way. The reasons for this are diverse: first off is the Bank of England’s caution on cutting […]