The safe-haven Swiss Franc and the Japanese Yen gained slightly on Thursday after the United States and North Korea failed to reach an agreement on denuclearisation of the Korean peninsula after two days of meetings. US President, Donald Trump, stated that an agreement was not reached owing to demands from North Korea to lift the sanctions led by the US. The markets responded in a typical knee-jerk reaction, with a flight to safe haven currencies
. There were also further dents in confidence in the global economy
as data for both China and Japan disappointed. It is clear that the US-China trade tensions over the past seven months are taking their toll on Asia Pacific’s economic performance and on growth across the globe.
Sterling still strong on Brexit hopes
In contrast, Sterling soared to its strongest for seven months on Wednesday 27th
February, as a no-deal Brexit
appears increasingly unlikely. There could now be a delay in the UK exiting the EU. UK Prime Minister, Theresa May, said that, should her efforts to get a new agreement fail, Members of Parliament will have the chance to vote in two weeks’ time, either for a no deal Brexit or a delay. It is believed that the majority of MPs are in opposition to a no deal Brexit, so this makes a delay in the UK’s departure for the EU more likely than crashing out with no deal. This sliver of hope has helped push the Pound up against its major currency partners and Sterling could continue to strengthen as events play out. However, there is a caveat: any delay will need to be brief, as if the UK remains an EU member after 2nd
July 2019, the UK will need to hold European elections. It never rains, but it pours…
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Dense data diary today
It’s a busy data diary
Switzerland releases its Gross Domestic Product (GDP) figures and key Economic Barometer report today. Their Economic Barometer shows a downward trend, as overall sentiment, particularly in the manufacturing sector
, continues to fall.
Germany releases its import price and Consumer Price Inflation (CPI) figures. France will release its GDP data.
Later in the day, the USA will finally release their Q4 GDP. Still in the US, Jobless Claims and the Chicago Purchasing Managers’ Index (PMI) will be featured. Canada will also release current account figures, along with the Canadian Industrial Product Price Index (IPPI) and Raw Materials Price Index (RMPI).