Stocks and pound lower in risk off session

Persistent concerns over higher future interest rates refuse to ease up and continue to weigh on global sentiment. Taking the leas from Wall, where the Dow closed almost 400 points lower and the S&P 1.1%, European bourses opened sharply lower. The FTSE also started trading lower on Thursday as it sets itself up for a third straight session of losses, however a Brexit bettered pound was at least offering some respite to the index.

Persistent concerns over higher future interest rates refuse to ease up and continue to weigh on global sentiment. Taking the leas from Wall, where the Dow closed almost 400 points lower and the S&P 1.1%, European bourses opened sharply lower. 

The FTSE also started trading lower on Thursday as it sets itself up for a third straight session of losses, however a Brexit bettered pound was at least offering some respite to the index. 

Brexit fears weigh on GBP/USD 

GBP/USD was hit hard in the previous session, dropping over 1% on Brexit fears as friction over the Irish border illustrates just how far apart the two sides are in terms of reaching an agreement. With time ticking away sterling is starting to revalue itself taking into account the increasingly possible event that no transition deal is agreed.  

UK manufacturing at 8 month low 

UK manufacturing hitting an 8 month low and printing at the second lowest level since Brexit has dragged sterling to levels not seen in 6 weeks. Manufacturing pmi ticked down to 55.2 in February, from 55.3 in January, although it was still above expectations. 

This reflects a continuation of the disappointing start to the year and a sharp slowdown from last year when manufacturing was considered a bright point for the UK economy with the pmi hitting a high 58.4 just as recently as November. 

If we were to look for a silver lining within these figures it would be indications that inflationary pressures are easing slightly, as raw material costs rose at a slower rate than January’s 11 month high, furthermore the pace at which firms passed on higher costs to their customer also slowed, albeit it still historically high. 

GBP/USD to $1.36? 

GBP/USD took another leg lower on the release, hitting a low of $1.3727. US factors are set to drive the pair this afternoon, as investors await a slew of US high impacting data such as PCE, ISM Manufacturing and Employment, in addition to another appearance by Fed Powell. 

The US dollar continues to advance following Powell’s appearance on Tuesday, where he strongly hinted towards a more aggressive tightening policy from the Fed. 

GBP/USD is finding some support at $1.3730. Another hawkish testimony from Powell or strong prints for the US data releases could see GBP/USD head back towards $1.3655 before continuing to $1.36. On the upside resistance can be seen at $1.38 before advancing to $1.3830. 

Chill on the UK high street continues 

Carpetright warned on profits for a second time today in just two months, slashing full year profit expectations whilst also confirming that it was in talks with its lenders to ensure that it complies with the terms of its banking facilities. 

The brutal winter hanging over the UK retail sector is showing no signs of letting up, as it moves further down the British high street. Consumers reining in their spending, in addition to an online shopping revolution is sending a chill down the spine of UK retailers. 

Shares in Carpetright have been on a downward trajectory for the past decade, dropping steadily from 911p back in 2010 to 173p at the beginning of the year. Today investors once again showed their concern for the health of the business jumping from the stock in droves, sending it another 25% lower to an all-time low of 57p

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