The “Remain Campaign” Comes Out Swinging At the GBP and Brexit Talk
GBP/USD is currently trading at about 1.4140, GBP/EUR is trading at 1.2515, odds are that the Sterling are both lower against the Euro and U.S. Dollar compared to where it was this time on Friday.
A couple of things over the course of the weekend, first off is the “Remain Campaign” coming out swinging this morning with a report from the Treasury showing or certainly predicting that due to higher import costs, lower trade revenue from the United Kingdom, that the average household would be £4,600 a year worse off if the United Kingdom were to leave the European Union.
Now, last week we saw in an opinion poll suggestion that a £100 a year loss per household may be enough to some voters to change their vote from “Leave” to “Remain.” £4,600 is obviously going to make a bigger dent than a £100. Therefore it would be interesting to see what polling shows off. This could be an interesting turning point in the campaign.
The “Leave Campaign” is out there saying that you can’t trust the Treasury figures, because obviously they are not independent, they’re working for the “Remain Campaign” as part of the wider government effort, but in the short term the Sterling is just a little bit lower on continued Brexit fears, but also I don’t think the suggestion in some circles that the unemployment numbers that we just got from the UK economy this Wednesday are likely to show the momentum the United Kingdom has for creating jobs and creating employment maybe starting to slow.
The big story over the course of the weekend is the Doha Oil Summit (OPEC members and non-OPEC members) meeting to supposedly craft a freeze in output that fell apart late last night. Saudi Arabia and Iran failing to agree on anything. Iran didn’t even send someone to the talks and going into the meeting we did suggest that the Iranian capping or freezing their output at current levels, given that they’ve only just been allowed to start pumping oil once again after the end of European Union and U.S. sanctions, did strike us as kind of strange. Oil prices are around 5% – 6% lower this morning.
Furthermore, the contagion of that is seen in the United States dollar strengthening, commodity currencies weakened and equity markets are lower. We’ve said that this isn’t a global risk shocker in so much that previous falls in equity markets as a result of falls in oil prices have been as a result of fears around the demand aspect of it.
This is an oversupply issue, so we reckon they’ll be fairly contained, but obviously it’s making things quite volatile this morning. U.S. dollar is on the front foot, Aussie Dollar, Rand, Canadian Dollar are all falling off this morning.
The data calendar is quiet, but we expect things to heat up tomorrow:
Sterling
The Sterling is expected to have a fairly quiet week. The Governor of the Bank of England is billed to speak on Tuesday. The Average Earnings Index and Claimant Count Change is due on Wednesday. Lastly, on the data calendar for the GBP on Thursday is the Retail Sales data.
Loonie
The Loonie starts off its week on Tuesday with a speech from the Governor of the Bank of Canada. While the Core CPI and Retail Sales data is billed for Friday.
brexit
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