Macro Commentary

The political uncertainty continues, with the Supreme court ruling against the government, saying the suspension of parliament was unlawful.

Parliament has duly been recalled, but with the Conservative party conference due to start this weekend, the situation remains incredibly unclear, with tensions running extremely high.

The Brexit deadline is just over a month away and there remains no clear way through the current impasse.

In the US, Trump being threatened with impeachment adds to the political turmoil, and has further weighed on market sentiment.

Whilst in the Eurozone, further weak data has added to the negative outlook, despite the efforts of the European Central Bank.

On the exchanges, sterling has come under further selling pressure following this week’s court ruling. The Euro also continues to weaken, hitting its lowest level against the dollar since May 2017.

GBP/USD has short-term support at 1.2250, with strong buying interest remaining at 1.2000. On the topside we remain capped by the pivotal 1.2550 level.

GBP/EUR failed to break 1.1400 and has weakened towards the interim support at 1.1200. Below here, there remains significant buying interest at 1.1000.

GBP/USD – 6-month chart

Week ahead

Date Release Last Expected*
30/9/19 UK GDP YoY 1.2%  1.2%
30/9/19 UK Mortgage Approvals 67.3k  66.4k
1/10/19 UK Markit PMI Manufacturing SA 47.4 47.2
2/10/19 UK Markit/CIPS Construction PMI 45.0 45.0
3/10/19 UK Markit/CIPS Services PMI 50.6 50.3
3/10/19 UK Markit/CIPS Composite PMI 50.2 50.0
4/10/19 US Nonfarm Payrolls 130k 140k

*Bloomberg survey

Equity Indices

Indices Previous Close YTD % Change
FTSE 100 7415 +10.25%
S&P 2977 +18.78%
EUROSTOXX 3532 +18.04%
DFM GENERAL INDEX 2798 +10.59%

Foreign Exchange

Currency Last Currency Last
EUR/USD 1.0920 AUD/USD 0.6760
GBP/USD 1.2275 USD/AED 3.6730
GBP/EUR 1.1245 GBP/AED 4.5100
USD/CHF 0.9935 EUR/AED 4.0120
USD/JPY 107.85 XAU/USD 1499

UK Benchmark Rates

Libor   Swap Mid  
3 month 0.77075% 2 year 0.68%
6 month 0.85163% 3 year 0.66%
12 month 0.93163% 5 year 0.62%

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