Following a busy day in British politics on Monday, cable started somewhat gingerly on Tuesday. Any Brexit suspension high was ended as the Pound was left a bit dazed by some uninspiring market performance indicators, and renewed General Election chatter.
While by no means a disastrous start to the day, there is no doubt the day’s political back-and-forth will contribute to Sterling’s emotional state, as all sides’ bombast plays fast-and-loose with market fundamentals.
Commenting on early morning currency movements, Spreadex Financial Analyst Connor Campbell stated,
“Despite a decent Asian session, the region continuing to push higher as ‘phase one’ of the US-China trade deal nears completion, the European markets slunk out of the gates on Tuesday.”
“After struggling to keep up with its peers on Monday, the FTSE once again started as the worst performing index, just about slipping under 7300 as it fell half a percent.”
“There were a few things counting against the index this Tuesday. A slump in Q3 earnings, even if they were better than forecast, helped send BP 0.9% lower, while a further slowdown in house price growth weighed on the likes of Barratt Developments, Berkeley Group and Taylor Wimpey, which were down anywhere between 0.7% and 1%. The index’s banking sector was also in a bad mood, likely because Boris Johnson, with help from the SNP and Lib Dems, is formulating a new way to get to a December election after losing a vote on Monday.”
“Talking of any potential trip to the polls, the pound coped fairly well with the prospect. Against the dollar it dipped just 0.1%, while against the euro it actually pushed up by the same amount.”
“Elsewhere the DAX and CAC both fell 0.3% apiece, effectively reserving the gains they had managed by Monday’s close.”
Elsewhere in political and macro economic news, there have been updates from; new Brexit deal agreed, UK economy looks likely to avoid recession, Hong Kong protester shooting and China’s strategy, the Supreme Court rules against Boris, the collapse of Thomas Cook (LON: TCP), the bid for the London Stock Exchange (LON: LSE), Lloyds Banking Group PLC (LON: LLOY), Barclays (LON: BARC) and Deutsche Bank (ETR: DBK).