Scotland still a winner
City Index September 19, 2014 2:51 PM
<p>Sterling trades stronger this morning following a solid ‘no’ outcome to the Scottish referendum, as was predicted by the bookmakers. A turnout rate of 85% […]</p>
Sterling trades stronger this morning following a solid ‘no’ outcome to the Scottish referendum, as was predicted by the bookmakers. A turnout rate of 85% was extremely impressive for any election in the modern world. The first big signal that the separatists were in for a tough night came as early as 10.30pm as the latest YouGov poll, taken over the course of Thursday, showed the ’no’ vote leading with 54%. The first official results came in around 1.30am from the district of Clackmannanshire which showed the same result as the YouGov poll at 54% in favour of ‘no’. This took cable above 1.65, and although the City of Glasgow voted ‘yes’, the margin wasn’t enough to turn the tide. My personal view is that Scotland can thank Rupert Murdoch and his YouGov poll, which 3 weeks ago revealed a 52% lead for the ‘yes’ campaign, subsequently sending the pound crashing and politicians heading north with an open cheque book. The majority outcome should finally put this debate to bed as Scotland now finalises the bill, due at the end of October, which will give them more independence. This bill will give Scotland greater power in regards to income tax, housing benefits, inheritance tax, capital gains, VAT and NHS funding, as the pound’s fortunes will return to the BoE interest rate path and economic picture.
USD/JPY traded just shy of 109.50 overnight as Japanese Health Minister Shiozaki suggested that the GPIF is considering an earlier time line to reallocate its investment portfolio. The Government downgraded its forecast on the Japanese economy suggesting that the BoJ will need to assist further in stimulating the economy. PM Abe said he was watching the effects of the sales tax increase on the economy before deciding his next move. BoJ Governor Kuroda and his deputy Iwata both dismissed the current level of the JPY suggesting the weakening JPY reflected the different directions monetary policy was taking in the US and Japan.
The data calendar remains light as a sleep deprived London focuses on Canadian CPI and US leading indicators.
Supports 1.2835-1.2800-1.2755 | Resistance 1.2945-1.2985-1.3040
Supports 108.85-108.40-108.15 | Resistance 109.45-109.90-110.00
Supports 1.6420-1.6390-1.6330 | Resistance 1.6525-1.6580-1.6625
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