Macro Commentary

A huge amount of UK data out this week that showed economic activity continues to weaken, although the Bank of England is likely to resist any cut in interest rates until well into next year, and once we have some political stability.

Earnings, inflation and retail sales figures were all weaker than expected, but were largely ignored by the market as politics continues to drive sentiment.

Volatility is starting to increase with less than a month to the general election. Conviction levels, however, remain extremely low.

In the US, the economy remains relatively robust, helped by the rate cuts, although political uncertainty and slowing global growth remain a real concern.

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

On the exchanges, we remain within the recent ranges as uncertainty prevails.

GBP/USD remains well supported around the 1.2800 level, whilst on the topside, 1.3000 remains key.

GBP/EUR has nudged up towards 1.1700 on general Euro weakness, its highest levels since May. We continue to see strong buying on dips towards 1.1500, whilst the year-to-date high of 1.1800 continues to be a formidable barrier on the topside.

GBP/EUR – 1-year chart

Week ahead

Date Release Last Expected*
20/11/19 US FOMC Minutes
21/11/19 UK Public Sector Net Borrowing 8.7b 8.6b

*Bloomberg survey

Equity Indices

Indices Previous Close YTD % Change
FTSE 100 7316 +8.65%
S&P 3096 +23.53%
EUROSTOXX 3704 +23.36%
DFM GENERAL INDEX 2701 +6.76%

Foreign Exchange

Currency Last Currency Last
EUR/USD 1.1020 AUD/USD 0.6790
GBP/USD 1.2875 USD/AED 3.6730
GBP/EUR 1.1685 GBP/AED 4.7300
USD/CHF 0.9890 EUR/AED 4.0480
USD/JPY 108.55 XAU/USD 1466

UK Benchmark Rates

Libor   Swap Mid  
3 month 0.78888% 2 year 0.78%
6 month 0.85838% 3 year 0.80%
12 month 0.95500% 5 year 0.82%

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