Brexit Dominates Queens Speech

The Queen delivered her speech from the house of lords yesterday morning with Brexit being the top topic and looks set to dominate the next two years of parliament’s legislative programme. Of 27 bills, eight relate to Brexit and its impact on immigration, and trade. Following her speech now brings a week of debating by members of parliament in the house of commons. During this time it is expected that Sterling is to remain on the back foot and could see the ongoing doom and gloom continue. With the result of the vote only a week away the conservatives still have to strike a deal with the DUP to support Theresa May’s government, with this decision still to be made sentiment is still likely to be heavily against the weakened Pound as uncertainty is rife, something investors repel from so should you have an imminent requirement it may be best to get something in place sooner rather than later to minimise the risk of a potential downfall once again.

Amongst the political goings on the pound was provided with a boost soon after the Queens speech in the early afternoon. Monetary policy committee member Andy Haldane made a speech and discussed his stance on the interest rate decision made earlier this week by Bank of England governor Mark Carney. Mr Haldane turned to a hawkish approach to raising interest rates in the UK. “Provided the data are still on track, I do think that beginning the process of withdrawing some of the incremental stimulus provided last August would be prudent moving into the second half of the year,” he said. It is worth noting that he was one of the 5 members to vote to keep the interest rates on hold but has since changed his view. Sterling gained nearly a cent on the Euro during his speech. However Sterling began to weaken slightly later on as the members of parliament battled it out in the Commons following the Queens speech, something that is likely to continue through to next week.

Late last night The Reserve Bank of New Zealand announced that is set to continue to hold interest rates which are currently at historic lows. The interest rate has been held at 1.75% since November last year when it was cut from 2.0%. The governor Mr Graeme Wheeler said it would “remain accommodative for a considerable period” in order to allow for flexibility amid” Ongoing extensive political uncertainty”. Market analysts do not expect the interest rate to change until mid-2018 at the earliest.

Today is fairly quiet on the data with only a few key data announcement due. Firstly in the Eurozone at 9 am, the Economic Bulletin will be published which could move the rates early on. Later in the afternoon Jobless claims will be announced in the US at 1.30pm, the figure is expected to rise from last month and should this be the case then Dollar could lose ground to its competitors. At 2 pm in the Eurozone consumer confidence will be released, the figure is expected to better last months, should that happen then the Euro could make gains on the Pound once again.