16th May 2019 Market Update
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?? GBP – Sterling touched new lows against the euro and dollar yesterday. These were the lowest levels since the middle of February. The reason for this drop was because it appears that the cross-party talks appear to be failing to reach a consensus. A fourth Brexit vote which is pencilled in for June, is widely expected to spell the end of Theresa May, and could add more political uncertainty. With the current trade war concerns, the market has therefore been far more risk averse.
There was no economic data of note from the UK yesterday, and there is nothing expected to be released today.
?? EUR – The euro remains firm in the current risk off environment. This was further supported yesterday when German and European GDP’s both came out in line with general market expectations at 0.4%. Like the UK, there is no significant data being released from Europe today. However, any Brexit developments or trade war developments could lead to the euro strengthening or weakening.
?? USD – Core retail sales and retail sales were both released from the US yesterday afternoon. They were both released below the market expectations at 0.1% and -0.2% respectively. However, despite the weak data, the market did not move significantly. The US stock market climbed yesterday as a result of Trump choosing to delay tariffs on auto imports up to 6 months. Initially in yesterday’s session yields dropped on safe bonds, however after this news the yields trimmed their decline.
Today building permits and the Phily Fed manufacturing index and building permits are being released from the US. However, this is unlikely to cause any significant market movements despite the historic importance of this data.
GBP: Brexit uncertainty drags sterling to 3-month lows
EUR: Euro remains as GDP meets market expectations
USD: Trump delays auto tariffs on Europe and Japan by 6 months
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