Macro Commentary

The EU have agreed to a Brexit extension as expected, but if anything this now just adds to the current market uncertainty.

The extension to October 31 is longer than the prime minister had hoped for, but there is the option to leave sooner should she get her deal passed, which continues to look unlikely.

A number of very different outcomes are all still possible.

UK economic data this week was relatively robust, with the focus now on next week’s inflation and earnings data.

At the European Central Bank meeting this week the committee kept policy on hold as expected, although they remain rather downbeat on the economy.

On the exchanges, we remain in the familiar ranges, with market conviction remaining low and political uncertainty remaining high.

GBP/USD continues to have strong buying interest at 1.3000, whilst 1.3350 remains the initial topside level to watch.

GBP/EUR has initial support at 1.1550, with the recent highs around 1.1800 continuing to hold the topside for now.

GBP/EUR – 1-year chart

Week ahead

Date Release Last Expected*
16/4/19 UK Average Weekly Earns. 3M/YoY 3.4%  3.6%
16/4/19 UK Unemployment Rate 3.9%  4.0%
17/4/19 UK CPI YoY 1.9%  2.0%
17/4/19 UK RPI YoY 2.5%  2.6%
17/4/19 EU CPI YoY 1.9%  2%
18/4/19 UK Retail Sales YoY 4.0%  4.6%

 

*Bloomberg survey

Equity Indices

Indices Previous Close YTD % Change
FTSE 100 7417 +10.33%
S&P 2891 +15.22%
EUROSTOXX 3432 +14.21%
DFM GENERAL INDEX 2790 +10.28%

Foreign Exchange

Currency Last Currency Last
EUR/USD 1.1287 AUD/USD 0.7125
GBP/USD 1.3060 USD/AED 3.6730
GBP/EUR 1.1570 GBP/AED 4.7965
USD/CHF 1.0025 EUR/AED 4.1450
USD/JPY 111.85 XAU/USD 1292

UK Benchmark Rates

Libor   Swap Mid  
3 month 0.82763% 2 year 1.02%
6 month 0.94100% 3 year 1.08%
12 month 1.08450% 5 year 1.19%

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