Macro Commentary

Brexit uncertainty continues to dominate, with the EU agreeing to extend Article 50 to May 22 if the prime minister can get her deal passed next week, or April 12 otherwise.

In other news, the Bank of England kept rates on hold yesterday as expected, with future policy very much dependent on Brexit developments.

In the US, the central bank also kept policy on hold this week, and forecast no change in rates this year and only one rate increase next year.

On the exchanges, continued Brexit uncertainty has taken the shine off sterling’s recent strength.

GBP/USD dipped towards 1.3000 yesterday, with strong buying interest remaining below. On the topside, the recent high around 1.3350 is the initial level to watch.

GBP/EUR failed ahead of 1.1800 this week, dropping sharply to below 1.1500 yesterday, before recovering slightly today. Strong buying interest remains ahead of 1.1300.

A critical week ahead for the eventual outcome of Brexit, which will likely keep markets extremely volatile.

GBP/USD – 1-year chart

Week ahead

Date Release Last Expected*
29/3/19 UK GDP YoY 1.3%  1.3%
29/3/19 UK Mortgage Approvals 66.8k  65.0k

*Bloomberg survey

Equity Indices

Indices Previous Close YTD % Change
FTSE 100 7355 +8.86%
S&P 2854 +13.88%
EUROSTOXX 3367 +11.90%

Foreign Exchange

Currency Last Currency Last
EUR/USD 1.1295 AUD/USD 0.7095
GBP/USD 1.3110 USD/AED 3.6730
GBP/EUR 1.1605 GBP/AED 4.8150
USD/CHF 0.9950 EUR/AED 4.1500
USD/JPY 110.60 XAU/USD 1310

UK Benchmark Rates

Libor   Swap Mid  
3 month 0.83871% 2 year 1.00%
6 month 0.96243% 3 year 1.04%
12 month 1.09443% 5 year 1.11%


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