Morning Brief – Monday 11th

Europe: In a period of continued weakness and pervasive uncertainty

 

Those words are Mario Draghi’s who as Governor of the European Central Bank is well qualified to use them. European interest rates will not rise before 2020 and a cheap funding scheme for banks will be re-launched aimed specifically at Spanish and Italian banks. Apart from the obvious which is that Spanish and Italian banks are most in need of assistance, the reason for this is the degree of exposure to those banks by the rest of the Eurozone’s banks: expect the words Contagion Risk to become a regular feature in the next 6 months. European growth has been forecasted down to 1.6% for 2020 and 1.1% for 2019. Both look optimistic. EUR has weakened considerably as have European stock markets last week. 

 

 

Global Markets

 

Weaker US employment data gave markets pause for thought at the end of last week. However the Dow closed only slightly lower at 25,450 and EUR/USD was also unchanged from the previous close. In the UK with further political uncertainty and Conservatives threatening to turn more against each other, GBP continues to slip against both USD and EUR. Gold slipped to $1299. Oil steady at $56. This is a big week for UK plc and markets are alert to each and every piece of news on Brexit developments. 

 

Buckle up!

 

 

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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