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Sterling slips on further Brexit deal dramas

Published: Monday 12 November 2018

  • Volatile week ahead for Sterling
  • Veteran's Day leaves markets quiet
​​By David Johnson
Sterling dropped back against all but the Euro over the weekend and I am pretty sure it has nothing to do with England throwing away a 15 – 0 lead against the All Blacks. The President of the European Commission, Jean Claude Juncker, has suggested that the UK and EU are tip-toeing towards a Brexit deal, but the UK Prime Minister is clearly having major problems getting agreement amongst her own cabinet and is being attacked by a certain Boris and held to ransom by the Democratic Unionist Party (DUP). I really don’t envy her and I would pay a lot of money to see some of the snide reporters, revelling in her discomfort, attempt to tie all those loose ends together. 
Volatile week ahead for Sterling
Saudi Arabia has announced they will cut oil exports by half a million barrels a day to try to stop the slide in oil prices. That has strengthened the value of oil and that generally weakens the USD, but Sterling and the Euro are weaker too and that has allowed the GBPUSD rate to drop a cent or two, whilst the Euro has made a similar move. Tomorrow’s UK employment and wages data may support the Pound and we expect Wednesday’s inflation data to do likewise. Thursday brings UK retail sales data and Friday will deliver the inflation report hearings. So, throw in a bit of Brexit shenanigans and the scene is set for a volatile week for Sterling.
As it is Veteran’s Day in the US and there is a dearth of hard data to be released, the markets will be particularly quiet. The week will bring plenty of reasons for traders to be active.  More of that tomorrow.
We will remember...

Meanwhile, what a humbling weekend of coverage of the Armistice Day commemorations in the UK and around the world. It continues in the US with Veteran’s Day today. Giving thanks for the lives of those who suffered physically or mentally or died in defence of strangers and loved-ones back home as well as the generations to come, has never been so poignant.  Sadly, some will remember it for the day Jeremy Corbyn chose to wear a scruffy coat and a red tie to the Cenotaph and the day Donald Trump chose not to attend a ceremony at a war cemetery to honour the dead because it was raining. If only those valiant young men who died a century ago could have kept their hair-dos dry in their hotel rooms when it rained, that would have been nice, wouldn’t it Mr President?
Second opinion
The doctor looked glum as he came back into the consulting room of a big US hospital. He was clutching the x-rays he had just been examining.
“Well,” he said. “There is no doubt about it, you are going to need surgery. Unfortunately, your health insurance won’t cover it, so we will need pre-payment of $8,500.”
“But I can’t afford that.” said the patient. “$500 is all I have in the world. Surely there must be another way?!”
“Well,” said the Doctor. “I could try Photo-shopping the x-rays.”

Today's Major Economic Releases

Market BST Data/Event Previous Expected
CAD All Day Canada: Bank Holiday    
USD All Day US: Bank Holiday    
NZD 21:45 New Zealand: Food Price Index -0.1% -0.1%

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