A good day to ‘Buy Hard’

28 February, 2019

Samuel Roberts

The past month has been anything but straight forward.  We have Theresa May battling to keep her Brexit deal alive, Eurosceptics in her own party rejecting the so-called backstop and the Pro EU Tories wanting to prevent a no deal Brexit, by delaying the date of Britain’s departure beyond March 29th.  Theresa May was facing a defeat over an amendment backed by the Labour MP Yvette Cooper, that aimed to rule out a ‘no-deal Brexit’.  Now the Prime Minister plans to give parliament a choice (over a three day period), to choose between her deal, no deal and a short delay in the Brexit.

On Tuesday, Theresa May was adamant that she is not in favour of any delay in the Brexit past the March deadline.  With all of the political posturing, threats and promises being devised the markets seemed to take the news very positively.

Yesterday the GBP/euro traded around 1.1687  the highest it has been since May 2017 and the GBP/USD traded around 1.3310, the highest it has traded since July 2018.  You could be mistaken in thinking the Government actually know what they are doing.

Todays’ economic data releases are as follows:

The GFK  Consumer Confidence report (established in 1934 as Gesellschaft für Konsumforschung, “Society for Consumer Research”)

This is a leading index that measures the level of consumer confidence in economic activity.  A high level of consumer confidence stimulates economic expansion while a low level drives economic downturn.

The Nationwide Housing Price Index

This morning, we have the month on month and year on year figures.  Historically, this shows the value of the house prices in the UK and is a good indicator of current movements in the housing market.  These, in turn, show the confidence (or lack thereof) in the housing market and the consumers ability to purchase, reflecting any strengths or weaknesses in the economy.

The Consumer Price Index

Published by INSEE (The National Institute of Statistics and Economic Studies) this is a measure of price movements (month on month) of a representative shopping basket of goods.  The CPI is a key indicator to measure inflation and any changes evolved in purchasing trends.  Here, a high reading is seen as positive (or bullish) for the Euro, while a low reading is seen as a negative.

With so much misinformation on the political landscape taking place and uncertainty affecting the currency markets, why not speak to your Currency Index Consultant.  You will be able to discuss one of the financial services we offer, that can help you mitigate risk and get the most out of these ‘unsettled waters’.