Brexit Barometer

27 October, 2016

The Brexit vote back in June taught markets never to take anything for granted and the same holds true for the upcoming US Presidential election. A poll lead for Trump in Florida yesterday, combined with some further revelations in the daily mud-slinging, have enhanced the perception that the race remains uncomfortably close for markets to become too complacent over. The Mexican peso has become the market’s favoured barometer of Trump sentiment, weakening yesterday by the most in 1 month on the back of the latest shift in sentiment. There has certainly been an increase in the simple rolling 1 month correlation between the peso and Trump polling over the past 3 months. Beyond the peso, the election effect has been relatively muted, unless you count the decline in volatility seen across most asset classes as a sign that investors are just sitting on the side-lines.

For today, sterling will be taking a very close look at the Q3 GDP numbers when they are released at 08:30 GMT. If the anticipated slowdown to 0.3% QoQ materialises, then this would be the slowest pace of growth seen since Q3 last year. No doubt there will be a huge analysis of what the numbers mean for Brexit, but the simple point is that it has not happened yet, so much of this will be hyperbole. The fall in the currency means that the inflation impact has overtaken the growth impact for the Bank of England, but sterling will still be sensitive to a deviation from this expectation given the many inferences and debate that will dominate.


Source link  
Bank of England Faces Conundrum

On Wednesday, data released by the UK Office for National Statistics (ONS) showed average weekly earnings (excluding bonuses) rose...

UK Inflation at 5-Year High

The likelihood of a rise in UK interest rates, for the first time in a decade, gained momentum on Tuesday as UK CPI edged up from 2.9% to 3.0%...

US Inflation Disappoints

US Consumer Price Index data was released and failed to impress the markets. With US gasoline prices spiking, following the disruption caused by the recent Hurricanes...


Can CPI Follow PPI Lead?

In early Friday trading, the markets are relatively static as they wait, in anticipation, for today’s US inflation data that will potentially give confirmation...

Fed Minutes: Inflation Conundrum

USD broadly declined as the markets digested the release of last month’s FOMC meeting minutes. Many FOMC Members are still concerned...

UK output data falls but expectations rise

On Sunday, The Confederation of British Industry released their monthly indicator of output for UK manufacturers, retailers and service companies...


US Economy Growing Faster Than Forecast

Data released on Thursday indicated that the US economy grew at a faster pace in Q2 than expected. The US Commerce Department released...

New Fiscal Year Could See Changes

With many countries entering a new fiscal year in October, many investors are summarising this past year’s portfolio performance while setting new goals...

New US data did not add positive

Published data on construction activity in the US in August slightly exceeded expectations. The number of building permits reached...

  


Share: