7th August 2018 Market Update
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🇬🇧 GBP – The market continued to punish the Pound following comments from cabinet minister Liam Fox on the weekend. The PM’s spokesperson tried in vain to tone down the risks to the UK falling out of the Eurozone without any deal as he said “we continue to believe that a deal is the most likely outcome because reaching a deal is not only in the interests of the UK, it is in the interests of the EU” but then also agreed that Mr Fox was correct as there is a risk of a no-deal Brexit and the government is prepared for all eventualities.
Today, we have no data releases of note, thus Brexit concerns will likely lead the sentiment.
🇪🇺 EUR – German factory orders retreated 4.0% on a monthly basis in June, recording its biggest fall since January 2017 and missing market expectations for a fall of just 0.5%. This is also a stark contrast to the previous month when the factory orders had risen 2.6%. However, in contrast Eurozone investor confidence beat expectations amid easing concerns over US-EU trade wars.
This morning, German trade balance figures have missed the mark along with industrial production, though this hasn’t weighed on the Euro.
🇺🇸 USD – The Dollar remains strong even with a lack of economic releases this week. The US earnings report saw 79% of the S&P 500 companies managing to beat forecasts and lifting US stocks, though attention is likely to return to trade frictions, geopolitics and the forthcoming US mid-term elections.
No key announcements today.
Summary: The Pound continued to slide yesterday, falling to the lowest level since September 2017 against the Dollar and fresh lows against the Euro, with concerns of a no-deal Brexit scenario dragging the Pound lower.
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