Finding the post-Brexit equilibrium

5 July, 2016

The post-Brexit roller-coaster has faded as a dynamic for markets, which is at least allowing us to get a clearer picture of what markets are really looking at. Dealing with sterling first, cable is now much more attuned to any material signs of the impact of Brexit on the economy and elsewhere. We’ve seen steady selling pressure on sterling since the European open, pushing cable below the 1.32 level. Standard Life have suspended redemptions in one of their property funds, which should perhaps not be that much of a surprise given the inherent illiquid nature of investments vs. investors. We also have Services PMI data at 08:30 GMT, but again this is too early to have a proper reading of the economy post-Brexit. Note that BoE Governor Carney speaks again this morning at the publication of the Bank’s Financial Stability Report.

In equities, stock markets are feeling a little more sanguine after last week’s gyrations and head of the US jobs numbers at the end of the week. The FTSE100 has done well, but that’s largely down to the make-up of its constituents, a decent proportion of whom price in dollars and have therefore benefited substantially from the recent exchange rate movements.

The main interest overnight was with the RBA, where we had at steady rate decision. That was largely expected, with the central bank probably wanting for a better picture of inflation outlook before assessing the outlook for rates. On balance, the Aussie has been broadly steady overnight, holding above the 0.75 level. Further rate cuts look likely this year, which could well put further pressure on the Aussie in the bigger picture.


Source link  
Divergence Between Fed and BoJ

The March FOMC meeting will be held for two consecutive days from today. The interest rate decision will be announced at 18:00 GMT on Wednesday 15th March...

Market Volatility Expected Ahead of President Trump's Speech

In a speech that will be watched by millions of viewers in the United States and around the world, the President is expected to speak of his presidency and address pressing issues like his plans for health care, the tax system, the military, and his goals for his administration...

Gold Trades Below Resistance Ahead of the Fed and NFP

We will see the release of the US ISM Manufacturing PMI, and ISM Prices Paid for January, at 15:00 GMT on Wednesday 1st February...


Sterling Struggles Ahead of Theresa May's Speech

Theresa May will make a speech outlining her plans for Brexit tomorrow, Tuesday 17th Jan, before the UK triggers Article 50 to leave the EU...

Dollar Turn-around on Trump's Press Conference

President Elect Trump's first press conference after his victory in the US presidential election, was held yesterday around at 16:00 GMT. It has caused great volatility to the dollar and the markets...

Gold Nears Major Resistance Ahead of Trump’s Press Conference

Gold prices have rebounded since mid-Dec after testing the significant support line at 1120. On the 4 hourly chart, gold bullish momentum has been strengthened since the beginning of this year, helped by the dollar retracement...


Searching for a new narrative

Popcorn at the read today as President elect Trump has a scheduled news conference later in the day (around 16:00 GMT). Markets have become used to listening to him in 140 characters or less over the recent weeks, so a more elongated narrative should be welcome...

The sterling conundrum

Yesterday's early weakness in sterling, on the back of the latest comments from PM May surrounding Brexit, took cable close to key support levels and the resilience seen through most of the post US election period has been unwound...

Selling into USD strength

In summary, Friday US jobs report was pretty much in line with expectations, although the slightly better data on earnings gave some support to the dollar into the end of the week. As a result, the US currency was little changed from Tuesday opening levels...

  


Share: