UK constitutional crisis hits sterling
Fiona Cincotta August 29, 2019 10:15 AM
Traders are very focused on the GBP, which saw another sell off yesterday amid heightened volatility on the currency.
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 up more than 2% in early trading and Glencore not far behind. The main UK index was up just over 60 points in early trading. Micro Focus 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.
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