Spreadex Market Update

Sterling upbeat despite Bercow refusing Johnson’s call for another meaningful vote



Though there were a couple of notable holdouts, the markets were broadly positive this Monday as investors held strong in their optimism regarding Brexit and the US-China trade situation.

The belief that the EU would agree to a Brexit delay, alongside renewed speculation that Boris Johnson may actually be able to get his deal passed this week, meant the pound’s early stoicism was rewarded with fresh 5-month highs by the afternoon. And this despite Speaker John Bercow rejecting the Prime Minister’s calls for another meaningful vote on said deal due to the rule stating MPs cannot be asked to consider the same legislation twice in the same session (as former leader Theresa May well knows).

Cable’s 0.3% increase left sterling once again eyeing $1.30 having briefly nearing that level last week, while against the euro the currency rose 0.4% to lurk at €1.165. Of course, with everything Brexit nothing is certain, and things could well swing pound-negative in the next few sessions. However, at the moment investors feel comfortable with sending sterling to its best price since May.

While these gains did prevent the FTSE from really opening up this Monday, it did avoid its usual anti-sterling dip into the red thanks to some trade-positive comments from Donald Trump’s economic advisor Larry Kudlow, who claimed that ‘things look pretty good’ between the US and China. The DAX jumped 0.9%, with the CAC up 0.4%; the Dow Jones, however, failed to budge after the bell.

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