The FTSE was in a bad shape on Monday morning, while the pound was relatively calm in the face of some worrying comments from Moody’s.
The UK index dropped half a percent, its commodity and banking stocks driving it lower. That took the FTSE back to 7320, having crossed 7400 at points last week. The likes of Barclays (LON:BARC), Lloyds (LON:LLOY), Standard Chartered (LON:STAN) and RBS (LON:RBS) have likely been hurt by Moody’s downgrading of its outlook on the UK’s current credit rating from ‘stable’ to ‘negative’, highlighting the country’s ‘paralysis in policy-making’ as Brexit continues to suck air out of the room.
The pound, meanwhile, was fairly sanguine, adding 0.1% against both the dollar and euro. However, since November began sterling has often been unable to maintain its stoic starts throughout an entire session – after all, cable began last week at $1.2937 and ended it the wrong side of $1.28.
The UK’s economic calendar is jam-packed this week – yet with the election, now around one month away, drawing attention, it will be interesting to see how much the pound pays attention to the onslaught of data. Ahead of Tuesday’s jobs report, Wednesday’s inflation figures – intriguing given the month’s split BoE rate vote – and Thursday’s retail sales, Monday has not one, but two GDP readings.
The latest monthly number is expected to come in at -0.1%, unchanged from the previous reading. The first glimpse at the UK’s Q3 growth, in contrast, is estimated to have bounced from -0.2% to 0.4% quarter-on-quarter. There’s also the manufacturing and industrial production numbers, both forecast to continue to lurk in negative territory.
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