Spreadex Market Update

Sterling’s shy start turns sulky as inflation holds at 2.4%; Brexit Cabinet meeting looms



Already concerned about this afternoon’s Cabinet meeting, the pound unwound a decent chunk of Tuesday’s wage growth rebound following October’s inflation reading.

Unchanged at a 13 month low of 2.4%, failing to meet the forecast 2.5%, the CPI data turned sterling’s shy start into sulk, with the currency shedding half a percent against the dollar and 0.4% against the euro. This, alongside an easing of BP and Shell’s losses as Brent Crude climbed back to $65.80 per barrel, allowed the FTSE to erase its early decline, the UK index returning to 7050 having at one point ducked under 6980.

Yet it feels incredibly unlikely that this’ll be the closing-positions for both currency and index this Wednesday. The morning’s trading is effectively just a distraction before this afternoon’s main event, with the performance of pound and FTSE alike almost entirely contingent on the outcome of the Brexit deal-discussing Cabinet meeting penned in for 2pm.

Elsewhere, the DAX and CAC managed to reduce their initial losses to 0.6% and 0.5% respectively, less than half the decline seen just after the bell. As for the Dow Jones, after last night’s oil issues, the US is going to try and attempt to reclaim 25300 with a 30 point rise when the bell rings on Wall Street.

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