The suffering of sterling

30 September, 2015

We reach the last trading day of what has been a fairly turbulent quarter for both equities and also FX. At the beginning, many were convinced that the Fed were on course to tighten policy during it and were anticipating the dollar increasing as a result. As it happens, the dollar is only marginally firmer overall (looking at the dollar index), but on the wider picture has gained vs. sterling, the Swiss franc and the dollar bloc on the majors. Emerging markets are another story all together. For the moment, the last day is looking a little more comfortable than earlier this week, with equities modestly firmer. The news from Japan disappointing, with both industrial production and retail sales falling to the soft side. The yen was mixed, but has sustained the move below the 120 level on USDJPY.

The interesting one has been sterling, with interest rate markets having been pricing out tightening, with the first move in rates now seen in the latter half of next year. This has drive the move above the 0.74 level on EURGBP, whilst cable was yesterday nudging level last seen early May. Carney spoke last night, but decided to talk about the environment, perhaps having given up on trying to guide markets on the timing of the first rate hike. For today, we have the final reading of GDP in the UK, with inflation data for the eurozone and the ADP release for the US ahead of Friday’s payrolls data. Volatility likely to be on the higher send given we are at quarter end.


Source link  
Markets recover after the drop

The markets decline on investors' fears that trade conflicts will drag on and slow down demand, and this dynamic coincided with breaking through important...

Markets pressured by Huawei problem

Alphabet and some other American IT companies have suspended business with Huawei, which is one of the first examples of major consequences for...

The climate is changing rapidly

British people need to fly less, drive electric cars, eat little meat and turn their home thermostats down to 19 degrees Celsius (66 Fahrenheit) in order to rein...


Chinese stocks saw their worst week

Chinese stocks have taken investors on a ride this year. Shanghai and Shenzhen have been the best performing global markets this year, with the Shanghai...

Risk-sensitive currencies on the rise

Stock markets show growth after the release of strong data for China and Japan as their respective PMIs were better than expected which supported...

Trump again puts pressure on OPEC

President Donald Trump told OPEC on Thursday that its members should start pumping more oil, marking his second warning to the producer group this year...


Turkish lira fell by 5% before elections

The Turkish lira dropped by as much as 5 percent against the dollar on Thursday morning, as the country gears up for elections this weekend. The greenback...

May won't ask for a long Brexit delay

Prime Minister Theresa May won't ask the European Union for a 'long' delay to the Brexit deadline, her office said, after pro-Brexit ministers objected...

Demand for safe assets grows

Markets remain under moderate pressure, despite the Fed comments. Powell's semi-annual speech in Congress reinforced expectations that the US Central Bank...

  


Share it on:   or