FTSE rises despite spanner from the Speaker
Fiona Cincotta March 19, 2019 9:42 AM
The London gauge is trading higher despite high Brexit drama unfolding in the background after Parliament's Speaker John Bercow blocked the Prime Minister’s plan to put her twice-rejected Brexit deal to a third vote Tuesday.
The London gauge is trading higher despite high Brexit drama unfolding in the background after Parliament's Speaker John Bercow blocked the Prime Minister’s plan to put her twice-rejected Brexit deal to a third vote Tuesday. This leaves Mrs May with little to take to Brussels on Thursday when she is due to ask the EU for a delay in Britain’s departure from the EU. While news, fake news and conflicting news are battling it out for investors’ attention, including unconfirmed reports that Jeremy Corbyn is looking to resign from the Labour party leadership, actual company news is helping the FTSE trade higher with copper miner Antofagasta and online retail specialist Ocado leading the way.
Sterling finds even keel
With speculation swirling on whether John Bercow’s decision will make it more likely for Britain to end up in a hard Brexit situation at the end of March or if it will mean that Brussels will try and impose an extended delay on Brexit, the currency market is trying to find its feet. An initial plunge of 1% in sterling/dollar has since reverted into only a minor decline in sterling’s value against the dollar and the currency has steadied to trade in a similar range as on Monday.
Dollar slides ahead of Fed meeting
In contrast, the dollar is lower ahead of the start of the Federal Reserve’s two-day rate setting meeting Tuesday and is losing ground against the euro and the yen. Recent weaker US economic data has lowered the yields on 10-year Treasuries and has made the dollar less appealing to investors. US rate setters are widely expected to stick to their plans announced earlier this year of a much slower pace of rate increases, but given that since their last meeting the labour market showed some weakening while the housing market started overheating, it is possible that the Fed may go back on its plans for two more hikes this year.
Wall Street is already reflecting some of the rising caution about the state of the US economy with stock markets showing much smaller increases than earlier in the year. The expected resolution of the US China trade talks still has the potential to give US industrials a major jolt, but without it some of the spectacular gains in the second part of last year may become a thing of the past.
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