- At midday in London, the AUD and GBP were the strongest while the EUR and JPY were the weakest among the major currencies, giving FX a “risk-on” tone.
- GBP/USD jumped after the Supreme Court said the prorogation case is justiciable i.e. it is a legal case and not just a political one and so PM Johnson's suspension of parliament was unlawful. If the Speaker John Bercow decides to end the parliament's suspension, the odds for a no-deal Brexit would fall further and so should be a positive outcome for sterling. However, today’s ruling also means that political uncertainty has increased with opposition leader Jeremy Corbyn calling for the PM’s resignation. But will Boris Johnson re-announce a prorogation? Or perhaps, will he resign? Anything is possible, so stay very nimble if you trade the GBP.
- EUR/USD was unable to break back above 1.10 following yesterday’s Germany PMI disaster. It didn’t move much in reaction to German IFO survey, which beat on the “current assessment” front (which came in at assessment 98.5 vs. 96.9 expected and 97.4 prior), but the “expectations” index disappointed (falling to 90.8 vs 92 expected, from 91.3 previously). We continue to think the EUR/USD could be heading to a new post-ECB low below 1.0925 in the coming days.
- AUD rose as RBA Governor Lowe in a speech earlier said what many had already expected: further monetary policy easing may well be required.
- As per my colleague Matt Simpson, “BoJ’s Kuroda has said the central bank will ease without hesitation and pay particular focus to the output gap and heightening risks. BoJ held policy steady this month but they appear to be laying the foundations for a lively meeting. This comes as Japan’s manufacturing PMI contracted for a fourth consecutive month and at its fastest rate since February.”
- Equities remained within their tight ranges with the bulls still in overall control amid hopes over a US-China trade deal, although ongoing global growth concerns kept the bears lurking around. US Treasury Secretary Steven Mnuchin said trade talks between US and China are set to continue next month. China, meanwhile, has granted tariff waivers for around 23 million tonnes of US soybean imports. But for the FTSE, the “GBP up = FTSE down” equation worked nicely for the bears once again, although with the global indices rising the downside could be short-lived for the UK benchmark index.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.