Daily Brexit update: Nissan won’t be the last
A decision by a high profile overseas-based manufacturer to switch production offshore is damaging enough in itself. An apparently coincidental recycling of already aired ideas by Downing Street on Monday exacerbates the look of a government whose store of ideas is running dry. Not to mention underscoring the absence of a sense of urgency. Nissan's decision to drop plans to manufacture a new SUV model in Sunderland comes even after the company was offered a controversial £60m support package soon after the 2016 referendum. It does not seem like a punchy call to predict further high-profile manufacturers will announce they’re pivoting away from the UK in coming weeks. Yet for now, another mooted round of talks with Brussels on the Northern Ireland remains unarranged. The slight movement in initiatives in that direction is that the Prime Minister will venture to Northern Ireland tomorrow to deliver a Brexit speech. We wonder how that will go down? This afternoon the Sun Newspaper suggests HM customs will temporarily avoid checking goods from the EU to prevent hold ups. No confirmation from Downing Street. Sights remain set on the next set of Parliamentary votes on 14th February.
How this affects our Brexit Top 10 markets:
GBP/USD: A spike on the Sun report recovers some of the loss pinned on weak construction data earlier, but the trend is still leaking gains since the 3-month top last week. Support above the $1.30 handle holds though. The rate was last at $1.3088.
GBP/JPY: No escape velocity from the ¥142.75 pivot. The sterling’s backslide leaves it at ¥143.95 and showing every sign of being magnetically drawn.
EUR/USD: Rangebound on a slight upswing yet beginning to revert well below the $1.15/1.155 range top. Latterly down 26 pips for the day at $1.1428.
EUR/GBP: The euro is also fighting back against sterling. Still the peak for now was on Friday at 87.93p. Sterling has enjoyed a slight bid at the start of the week, moderating the appearance of softness against the dollar and yen.
UK 100: The UK benchmark is soft with global markets in lieu of strong broader direction with the earnings and economic calendar light and China on holiday.
Germany 30: An awkward earnings season and weakening economic counters keep capping the German benchmark. It’s down 0.6%.
Lloyds: A 0.4% fall is slightly deeper than the FTSE’s flat-to-down state.
Barclays: Slight outperformance of its rival laden with more UK deposits sees Barclays fall 0.2%.
Tesco: Flat yet weak, like the FTSE, perhaps helped by brokerage upgrades in the retail industry
Barratt: Ahead of a closely watched update, lack of broader direction contributed to the shares slipping 0.3%.
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