Market Brief: Sterling Pounded
Fawad Razaqzada December 17, 2019 7:46 AM
A summary of news and snapshot of moves ahead of the US session.
- Market update at 12:35 GMT: In FX, GBP was by far the weakest major currency while haven CHF was the strongest. Stocks were mostly in the red in Europe, although off lows, while Italian shares bucked the trend with the FTSE MIB being the sole major index in the green. Crude oil was up for the 4th straight day. Metals, including gold, silver and copper, all edged higher. Bitcoin was lower.
View our guide on how to interpret the FX Dashboard
- GBP was hit by a double whammy of bad news this morning. Reports emerged that the UK government wanted to block the EU transition extension beyond 2020 which raised concerns that this could potentially result in a hard Brexit. Then, the latest wages data came in below expectations at 3.2% 3m/y vs. 3.4% expected, while unemployment claims grew more than anticipated to 28,800 vs. 21,200. GBP/USD was testing THIS key support level.
- Stocks in the aerospace and defence took a hit this morning after Boeing’s (BA) decision to temporarily suspend production of its 737 Max airliner from January. Unilever (ULVR) tumbled 5.6% after warning that it will miss its full-year revenue growth targets.
- FTSE’s big rally came to a halt along with European shares. As my colleague Fiona Cincotta reported earlier, domestic focused stocks that had rallied following a resounding win from the Conservatives and Brexit clarity once again found themselves on the back foot amid the threat of no (trade) deal Brexit. Lloyds, RBS and home builders dominated the lower reaches of the index.
- Market sentiment remains overall upbeat despite today’s mild sell-off in European stocks. Indeed, Wall Street has just hit a fresh record high on Monday. The agreement between the US and China to agree to a phase one deal, which is yet to be signed, has helped de-escalate the damaging trade war between the world’s biggest economies. There were no fresh developments on this.
- Coming up
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. 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 warranty 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, author does not guarantee its accuracy or completeness, nor does 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.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.