Market Brief: Sterling Pounded

A summary of news and snapshot of moves ahead of the US session.

  • Market update at 12:35 GMT: In FX, GBP was by far the weakest major currency while haven CHF was the strongest. Stocks were mostly in the red in Europe, although off lows, while Italian shares bucked the trend with the FTSE MIB being the sole major index in the green.  Crude oil was up for the 4th straight day. Metals, including gold, silver and copper, all edged higher. Bitcoin was lower.

           

View our guide on how to interpret the FX Dashboard

  • GBP was hit by a double whammy of bad news this morning. Reports emerged that the UK government wanted to block the EU transition extension beyond 2020 which raised concerns that this could potentially result in a hard Brexit. Then, the latest wages data came in below expectations at 3.2% 3m/y vs. 3.4% expected, while unemployment claims grew more than anticipated to 28,800 vs. 21,200. GBP/USD was testing THIS key support level.

  • Stocks in the aerospace and defence took a hit this morning after Boeing’s (BA) decision to temporarily suspend production of its 737 Max airliner from January. Unilever (ULVR) tumbled 5.6% after warning that it will miss its full-year revenue growth targets.
  • FTSE’s big rally came to a halt along with European shares. As my colleague Fiona Cincotta reported earlier, domestic focused stocks that had rallied following a resounding win from the Conservatives and Brexit clarity once again found themselves on the back foot amid the threat of no (trade) deal Brexit. Lloyds, RBS and home builders dominated the lower reaches of the index.
  • Market sentiment remains overall upbeat despite today’s mild sell-off in European stocks. Indeed, Wall Street has just hit a fresh record high on Monday. The agreement between the US and China to agree to a phase one deal, which is yet to be signed, has helped de-escalate the damaging trade war between the world’s biggest economies. There were no fresh developments on this.
  • Coming up



Related Articles

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.