UK Constitutional Crisis Hits Sterling

UK Constitutional Crisis Hits Sterling

City Index  | Aug 29, 2019 12:59

The decision by the government to prorogue parliament in a bid to reduce the amount of time MPs will have to cook up legislation that could delay a hard Brexit is dominating headlines. The British government is banking on the threat of a hard Brexit to bring the EU back to the negotiating table.

Traders are very focused on the GBP, which saw another sell off yesterday amid heightened volatility on the currency. The options market is showing that there are expectations for some big swings in the currency over the coming weeks.

Beyond the currency markets, miners were leading the FTSE 100 this morning, with Fresnillo (LON:FRES) up more than 2% in early trading and Glencore (LON:GLEN) not far behind. The main UK index was up just over 60 points in early trading. Micro Focus (LON:MCRO) shares saw some major selling as it again had to review its revenue forecasts.

Treasury yields trump trade talks in Asia and US markets

Overnight trade in Asian markets was slow. US energy shares rose on Wednesday, pulling markets in North America up, but traders in Asia are still very focused on the tit for tat trade rhetoric that is going on between the US and China.

Big questions remain over the health of the US economy going into today’s trading session with the 30-Year Treasury now trading at an historic low yield. This is seen by many analysts as an indicator of a slowdown in the US economy or even a recession.

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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