Market News & Analysis
Blue chip earnings shrink
Fiona Cincotta March 5, 2019 10:21 AM
Food stock piling and lower non-essential item sales reflect Brexit worries
Brexit is now very much part of the fabric of how consumers live and breathe. Although on the year the level of consumer spending has barely changed, it is up 0.5%, consumers have been holding back on buying non-essential items like clothes or spending on entertainment including hotel stays. However, the love of a good pint is still in play, food buying has increased and there has been more evidence of stock-piling of food and other essential items during February.
The evidence of slowing economic growth will play a factor at the Bank of England’s next rate setting meeting but Brexit is likely to keep the rate setters’ hands tied until there is a final resolution to Britain’s divorce from Europe.
The currency market is reflecting this caution with the pound trading barely changed against the euro and marginally weaker against the dollar. Still, sterling remains comfortably above $1.30, the unofficial no-deal Brexit marker.
Oil nudges lower on profit taking
Oil traders took some profits off the table after prices rose nearly 2% on Monday, helped by trade deal optimism and concerns that a shutdown of a Nigerian oil terminal could temporarily disrupt oil exports from this OPEC member. Brent crude prices initially dipped 0.85% but seem to have stabilized. OPEC production cuts over the last few months continue to keep Brent prices at the higher end of the $60-$70 range, at least as long as President Trump doesn’t express his dissatisfaction with higher oil prices, as he did in February.
From time to time, GAIN Capital Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.