The pound remains subdued and is looking increasingly vulnerable to further declines should the situation continue as it is. The UK and EU appear at another impasse. The backstop is the focal point and progress on the issue seems limited. The EU require new ideas and proposals to contemplate by the end of this week. It’s safe to say, this doesn’t look likely to happen.
Last night’s meeting minutes from the Federal Reserve were a dud. The market response was muted and there was little new information highlighted. The one take away is that the Fed believe the market might be expecting too much accommodation from them. Essentially, they may not end up lowering interest rates as fast and by as much as current market consensus indicates.
Today’s trading session is a little more interesting than the previous days this week. From the UK’s perspective, manufacturing and industrial production numbers will be released this morning. Alongside these numbers will be the monthly GDP reading for September which is expected to come in at a whopping 0%! In addition, we’ll see a speech from Bank of England governor, Carney. From across the pond, US inflation (consumer price index) will be the highlight. This gauge is closely watched by the Fed and could influence further monetary policy.
Lastly, and maybe most importantly, today will see a power lunch between PM Johnson and Ireland’s Leo Varadkar. This comes as the Brexit blame game kicks-off. Many will be hoping the two find some compromise which could offer a last minute solution to what’s been a long and frustrating process.
Written by Viv Savani. 8:38am, October 10th 2019
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