Sterling Traders Seek New Indicators As Westminster Goes Quiet

Sterling Traders Seek New Indicators As Westminster Goes Quiet

City Index  | Sep 11, 2019 09:35

Parliament may now be closed but it is proving to be an interesting week for the pound. We saw some violent price action yesterday, with the pound initially rising on the back of some very positive UK jobs data and wage growth figures. This saw it hit 1.238 vs USD at one stage before it was sold down again to under 1.231, likely on profit taking from large actors in the market.

Later in the day we saw a second rally and overnight some violent moves, between the 1.234 and 1.2369 level. We have seen similar volatility in the GBP/EUR.

On paper the jobs data looks good for the UK economy. With the news flow out of Westminster toned down, some investors are reverting back to economics. There are also indications that the government is creeping closer to an agreement with the EU on Northern Ireland and may even be making progress on a deal that it can present to the Commons when it returns on 14 October.

Ocado (LON:OCDO) leads FTSE up in early trading

The FTSE 100 opened up this morning and we are seeing buying in several big names, with no bias towards sector. Ocado (LON:OCDO), JD Sports (LON:JD), NMC Health (LON:NMC) and Legal & General (LON:LGEN) lead a pack of stocks which are up over 2% this morning.

Asian markets cautiously optimistic ahead of ECB meeting

Asian markets were cautiously up overnight but there now seems to be plenty of focus on the ECB meeting tomorrow, where the bank is expected to take Euro rates deeper into negative territory. There was also some positive sentiment out of China where the government has decided to suspend tariffs on 16 types of US exports, which is widely being seen as a conciliatory move ahead of renewed talks. The CSI 300 benchmark in China broke away from the 3850 level to trade north of 3930 most of the day.

Bolton sacking sees oil at new level

In the US the big overnight news was the sacking of National Security Advisor John Bolton. This was immediately seen as positive news for geopolitics and a potential defusing of tensions with Iran. Oil dropped suddenly from 63.79 (Brent) to under 62.20 in a very short period of time. The reaction was possibly too extreme, as oil has been climbing slowly back overnight and is now at 62.90. This is around the level it established on Monday.

Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.

Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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