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Weekly Report 06/01 – 10/01

The brewing middle east crisis is creating a risk off environment for global markets as investors shun riskier asset classes. Equity futures are in negative territory and the only beneficiaries have been USD and Gold due to their perceived safe haven status.
Gold has performed very well lately with a 5% rise in 2 weeks and is generally accepted as the barometer in global risk and is particularity sensitive to geo-political risks

Risk aversion is not the only contributor to recent GBP woes as growing concern that the UK will crash out of the EU by the end of year after failing to reach a trade agreement is keeping the noose firmly round GBP related pairs. PM Boris Johnson is scheduled to meet European Commission President Ursula von der Leyen on Wednesday to discuss Brexit proceedings, naturally comments or progress will be closely monitored by currency markets for clues on which direction GBP will take next.

Brexit progress will very likely remain the primary driver for GBP in 2020, however the markets have started to take note of how the stagnancy of Brexit has brought the UK economy almost to a standstill. The Bank of England in early and middle parts of 2019 were teetering on the side a rate hike as they expected an increase in activity, sadly this failed to materialise and in their latest December policy statement they forecast the economy grew by 0.1% in the final three months of 2019, and two members have voted for rate cuts in as many meetings, citing weaker productivity and need to support our slowing economy.

Tuesday 7th January

US ISM Non-Manufacturing

Wednesday 8th January

UK Boris Johnson / European Comm President Meeting

Friday 10th January

US Unemployment Figures

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