Macro Commentary

Concerns over the current break down in the US-China trade talks, and Trump announcing higher tariffs, have weighed heavily on the markets this week. The negative sentiment has led to a sell off across the major equity indices.

In the UK, Brexit talks continue between the two main parties, with the Prime Minister hoping to bring her deal back for another vote in the coming weeks, but there continues to be little tangible progress, and speculation continues to grow on the Prime Minister’s future.

The UK will now take part in the EU elections, which is only likely to add to the current political uncertainty.

On the exchanges, sterling remains near the bottom of its recent ranges, whilst volumes remain low.

GBP/USD continues to find some decent buying interest below 1.3000 for now, however sentiment remains weak while we remain below 1.3130. Stronger support lies 1.2850.

GBP/EUR continues to be well supported at 1.1500, while the well-established recent high of 1.1800 continues to hold the topside.

GBP/USD – 1-year chart

Week ahead

Date Release Last Expected*
14/5/19 UK Average Weekly Earns. 3M/YoY 3.5% 3.4%
14/5/19 UK Unemployment Rate 3.9% 3.9%
17/5/19 EU CPI YoY 1.4% 1.7%

*Bloomberg survey

Equity Indices

Indices Previous Close YTD % Change
FTSE 100 7207 +7.85%
S&P 2870 +14.52%
EUROSTOXX 3350 +12.60%

Foreign Exchange

Currency Last Currency Last
EUR/USD 1.1225 AUD/USD 0.6995
GBP/USD 1.3005 USD/AED 3.6730
GBP/EUR 1.1580 GBP/AED 4.7760
USD/CHF 1.0150 EUR/AED 4.1230
USD/JPY 109.75 XAU/USD 1285

UK Benchmark Rates

Libor   Swap Mid  
3 month 0.80963% 2 year 1.02%
6 month 0.91425% 3 year 1.07%
12 month 1.06000% 5 year 1.16%


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