After yesterday’s court ruling and with 37 days left to the current deadline: 40% probability of NoDeal. And that is despite the Benn Amendment that prevents the U.K. leaving with NoDeal(!)
Meanwhile the cliff edge uncertainty has sent UK factory output expectations to a 10 year low. Stocks of finished goods have increased at the fastest rate since the 2008 financial crisis.
And just for good measure the Prime Minister is flying back overnight fresh from trade talks with POTUS to confront both his own party and the rather larger number of Her Majesty’s opposition made up from a variety of parties: a sort of loose Rainbow Coalition!
Yesterday the Fed injected $30 Billion of 14 day cash and $75 Billion of overnight funds. The US market correctly read not only the impact of this funding but also received the message that the Fed was in interventionist mode and did not want to see a spike in short term interest rates to 10% like last Tuesday. Result: calm. This is what international markets are very much focused on in these days of political and economic uncertainty: central bank actions that they can respect and understand.
Here at SGM-FX global HQ we know full well the danger of joking about outlandish concepts that defy reality, just in case they ever come to pass- but here goes: the concept advanced by Her Majesty’s Opposition regarding the cutting of the working week from 5 to 4 days with a maximum of 32 hours worked but with the same amount of pay is no less than a miracle of alchemy- turning base metal into gold. At a stroke this would mean an increase of work productivity of 20% overnight-something that no government of any party has ever managed to achieve since the Romans put the ancient Britons to work , but that was 7 days a week and 2000 years ago when employment law was let’s just say non existent!
SGM-FX’s intrepid traveller Richard was seen yesterday lunchtime pouring over a Thomas Cook brochure ( has no-one told him?!) and looking at long weekends in Europe. Bless!
Discussion and Analysis by Humphrey Percy, Chairman and Founder