What a week for Sterling! After signs of a no-deal Brexit being the almost guaranteed outcome, Britain and Ireland surprise the markets with very positive comments to rocket the British pound to the top spot among the major currencies!
United Kingdom Headlines and Economic data
- Scottish court rejects legal bid to force PM Johnson to seek Brexit delay – Sterling bearish sentiment off this news as it kept up the likelihood of a no-deal Brexit scenario at the end of October.
- U.K. House prices in September 2019 were 1.1% higher y/y, -0.4% m/m
- BRC Retail Sales Monitor: Down -1.7% in Sept. m/m; Spectre of no deal holds back spending
- Britain’s Johnson tells EU: Brexit ball is in your court now
- Revealed: the EU’s point-by-point rejection of Johnson’s Brexit plan
- Johnson Tells Merkel Deal ‘Essentially Impossible’: Brexit Update – Sterling took a dive across the board off of this headline which to traders, made the no-deal scenario almost a guaranteed outcome. Global risk sentiment shifted negative, and likely a drag on Sterling as well, off of fading optimism in the U.S.-China trade negotiations story after reports of the U.S. blacklisting more Chinese companies from trade, and possibly on reports of the White House looking to limit Chinese stocks within government pension funds.
- Mark Carney says Bank of England to stress test banks with ‘catastrophic’ climate scenario
- UK publishes update to no-deal Brexit plans, seeking to reassure businesses and voters
- Scottish court hears arguments about Brexit delay letter to EU
- Johnson and Varadkar to Meet as Deal Chances Fade: Brexit Update
- Brexit: Scottish court delays decision on extension letter
- Irish prime minister says big gaps remain in Brexit talks
- DUP and Eurosceptics reject Brexit offer on Irish backstop
- No-deal Brexit ‘dangerously realistic scenario’: Finnish minister
- EU parliament head says Britain now faces choice of Brexit delay or no deal
- British PM Johnson ‘still cautiously optimistic’ on Brexit deal
- Brexit Uncertainty Weighs On UK Housing Market: RICS
- UK set to avoid recession despite poor August
- Recession fears stoked as UK manufacturing plunges
- UK data show economy a bit weaker than expected: Carney
- The total U.K. trade deficit (goods and services) narrowed £13.0B to £4.6B in the three months to August 2019
- Total U.K. production output fell by 0.4% for the three months to August 2019
- The UK economy is on course to grow by 0.5% in the third quarter of 2019 and by 0.3% in the fourth quarter according to NIESR estimate
- Britain and Ireland say there is pathway to Brexit deal – this was the headline to set off a massive rally in Sterling as it did a 180 degree flip in sentiment on the possibility of a no-deal Brexit, which was extremely negative just a day ago after Johnson’s ‘essentially impossible’ comments and rejection of his latest Brexit plan.
- Donald Tusk: No workable Brexit deal yet, but let’s keep talking
- No fresh Brexit catalysts but Sterling continued its monster rally higher off of Thursday’s headlines. It’s gains were possibly helped along by the very positive shift in global risk sentiment in other geopolitical (Trump says ‘good things’ are happening at China trade talks) and monetary policy news (Fed is extending its overnight funding operations through January 2020), easily taking the top spot as the best performing currency of the week.