Macro Commentary

Election fever is obviously dominating the headlines and market sentiment, with uncertainty at extreme levels.

There is a lot of UK economic data out next week, but these will remain very much secondary to political events.

We expect market volatility to remain high, whilst conviction levels and liquidity will likely remain low.

The Bank of England kept monetary policy on hold yesterday as widely expected, though two members did actually vote for a rate cut.

In the US, we now expect the central bank to remain on hold for an extended period of time following last week’s rate cut.

The US-China trade negotiations have made some real progress, and this helped push stocks up to new all-time highs.

Whilst in Europe, the central bank continues to encourage governments to introduce fiscal policies to stimulate growth, as monetary policy is reaching it limits.

On the exchanges, we have seen some decent dollar strength across the board.

GBP/USD has drifted lower towards its 1.2800 support level, and there remains good buying interest below here. On the topside, 1.3000 remains key.

GBP/EUR remains very much within its recent range of 1.1500 – 1.1700, which continue to be the key levels to watch.

GBP/EUR – 1-year chart

Week ahead

Date Release Last Expected*
11/11/19 UK GDP YoY 1.3%  1.1%
11/11/19 UK Industrial Prod. YoY -1.8%  -1.1%
11/11/19 UK Manufacturing Prod. YoY -1.7%  -1.3%
11/11/19 UK Construction Output YoY 2.4%  1.2%
12/11/19 UK Average Weekly Earns. 3M/YoY 3.8% 3.8%
12/11/19 UK Unemployment Rate 3.9% 3.9%
13/11/19 UK CPI YoY 1.7% 1.7%
13/11/19 UK RPI YoY 2.4% 2.3%
14/11/19 UK Retail Sales YoY 3.1% 3.7%

*Bloomberg survey

Equity Indices

Indices Previous Close YTD % Change
FTSE 100 7384 +9.80%
S&P 3085 +23.07%
EUROSTOXX 3969 +23.17%
DFM GENERAL INDEX 2698 +6.64%

Foreign Exchange

Currency Last Currency Last
EUR/USD 1.1050 AUD/USD 0.6885
GBP/USD 1.2815 USD/AED 3.6730
GBP/EUR 1.1605 GBP/AED 4.7070
USD/CHF 0.9960 EUR/AED 4.0575
USD/JPY 109.30 XAU/USD 1471

UK Benchmark Rates

Libor   Swap Mid  
3 month 0.79913% 2 year 0.80%
6 month 0.89338% 3 year 0.82%
12 month 0.98725% 5 year 0.85%

London

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