Daily Brexit update Sterling jumps again as government frays

Daily Brexit update: Sterling jumps again as government frays

Sterling is withstanding the dollar’s revival by safe-haven bid. The greenback returned to favour after the U.S.-China trade dispute took an unforeseen turn overnight. The pound saw a second promising session though after news reports said ministers might be trying to postpone next Tuesday’s parliamentary Brexit vote. Newspapers cite fear of a defeat so seismic that the government could implode. Downing Street insisted in the afternoon that the vote would go ahead. The pound against the dollar was near the day’s highs at last look.

How this affects our Brexit Top 10 markets:

GBP/USD: At around $1.2780, cable was some 85 pips above Thursday’s low. Short covering undoubtedly plays a part. That suggests buyers should be prepared to fade at a moment’s notice.

GBP/JPY: The yen is winning out against sterling regardless, hallmarks of wider ‘risk-off’ conditions.

EUR/USD: Optics are also favourable for the single currency on hopes that the UK’s exit could hit the buffers. EUR/USD was also more than 80 points up from lows. As it approaches the month’s $1.420 high, the same cautions should apply as per sterling.

EUR/GBP: It could be telling that the less volatile single-currency pair is bid on the euro side, again pointing to cable short covering.

UK 100: All international stock markets participate in the global sell-off, but the FTSE even somewhat underperforms in Europe since the start of the week. This is probably due to ties to China and oil. OPEC was still dithering over whether to go ahead with an effective supply cut at last look.

Germany 30: Germany’s benchmark leads Europe to the year’s low, though not quite the two-year low that some major equity gauges have reached.

Lloyds: As we anticipated, the share’s rise a day ago on ‘No Brexit’ hopes has reversed, underlining that optimism is not robust. It traded some 2.8% lower.

Barclays: The biggest UK banks face dwindling net interest income as global market rates tumble. U.S.-tilted Barclays, whose share price loss matches Lloyds’, is also tied to Wall Street gyrations on trade. Like many U.S. shares, improved U.S.-Sino relations could trim some of its deep fall this year.

Shell: The FTSE’s biggest faller with a 4% drop. The first day of OPEC’s two-day meeting has passed without a clear agreement on supply cuts. Shell also said it’s reviewing deals by a former exec accused of bribery.

BP: Shell’s rival slips with the global sector.

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 www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.