Mmm… Well… What an interesting day for global FX markets. The day kicked off with the Court of Justice of the European Union confirming the opinion expressed by the Advocate General that Brexit is indeed reversable. Article 50 can be unilaterally reversed by the United Kingdom should it choose to do so. Despite confirming a greater breadth of possible options available to Britain as it negotiates its potential secession from the Union, the rest of the day left the Pound bruised and battered. The Pound has fallen to 18-month lows as the Prime Minister announced to Parliament this afternoon that the Brexit vote would face a considerable setback. After an emergency cabinet meeting at 11:30 this morning, concerns around May’s capacity to push through the vote through the Commons was confirmed, precipitating a spiral in underlying UK markets. The FTSE 100 index simultaneously slipped, led by tumbling financial equities. The headline index closed the day down 0.8% down, confirming investors’ increasing lack of confidence in British investments through this tumultuous time. Concerns surrounding the Indian central bank, volatility and consequent risk-off sentiment offered a great footing for the US Dollar to appreciate. Emerging markets unsurprisingly endured the wrath of animal spirits.
Today’s Global Market:
Discussion and Analysis by Charles Porter
Sterling No sooner had the financial press written that Sterling was on the skids due to the Chancellor being on the way out, than PM Starmer woke up to the need for some TLC for his beleaguered Chancellor and executed a handbrake turn to administer some gruesome bedside cheer to the apparently on life support […]
EU Inflation With the ECB annual symposium meeting in sunny Sintra, Portugal, inflation is very much on President Lagarde’s mind ; that is because it is showing signs of rising with the monthly inflation rate showing an increase of 0.3% and that presages a break above the target 2% rate just as she and her colleagues […]
Gold With Gold accounting for the second highest proportion of Central Bank reserves after the USD and the mood music shifting to it assuming a greater influence on future reserves management, it is worth looking at the numbers behind that. In the 1960s, Central Banks held the highest amount historically of 38,000 tons of gold. […]