Sterling loses more ground as Johnson threatens election
Fiona Cincotta September 3, 2019 10:24 AM
The big story for traders is the fact that MPs return to Westminster today, albeit not for long, before the government prorogues Parliamen
The big story for traders is the fact that MPs return to Westminster today, albeit not for long, before the government prorogues Parliament. Boris Johnson yesterday followed up on his dire warnings to potential rebels in the Tory ranks with the additional message that he will call an election if he the House of Commons turns on him.
Sterling has fallen against all the G10 currencies in the last week, and is down 2.47% versus USD, 1.36% against the CHF and 1.1% against the EUR.
Ferguson shares rise on demerger announcement
The FTSE opened marginally up this morning, led by plumbers merchant Ferguson, which has announced it is de-merging and spinning off a large part of its operations to the US. The decision is subject to shareholder approval and has sparked controversy among some investors, particularly fund managers, some of whom won't be able to hold Ferguson when it lists in the US. Ferguson will continue to trade in the UK under its old Wolseley brand.
US markets poised to respond to new tariffs
The US returns from the Labor Day long weekend today, but S&P 500 and Dow futures are predicting that US equity markets will open down today. The markets there have not had a chance to react to the introduction of 15% tariffs on $112 billion of Chinese goods.
There seems to be no end in sight in the US-China trade negotiations. There is very little news coming out of either Washington or Beijing on the progress of the talks. Economists at UBS have warned that the stand off is starting to have an impact on both the US and global economies.
China, however, seems less affected, with the Caixin China manufacturing index rising above the 50 mark, indicating that the country’s vaunted manufacturing sector is back into expansion mode.
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