Please find below our Weekly Market Update for the week ending 6th September 2019.
Blue Sky Comment
What a week in Parliament. Laughable at times, vitriolic, theatrical for sure… showing politics at its best and worst.
A ‘no deal’ Brexit on the 31st of October now looks unlikely and a general election is looming. The pound strengthened on the news despite the uncertainty this will bring. There was a sense of relief from investors that a chaotic and disorderly Brexit may well have been avoided. Sterling effectively has recovered the ground that it lost last week. Sterling’s direction over the longer term really does depend on when an election is called and who looks likely to win. The polls will then determine how the currency fares in the short term. A coalition looks on the cards but between whom?
On the world stage, for now, things look less uncertain. The Dow Jones posted its biggest one day rise for 3 weeks on rising trade optimism and better economic data.
With regards to China and the US’s trade stand-off, both sides have agreed to resume talks in October. This follows the imposition of tariffs last weekend and expected increases over the next few weeks. Negative news fuels concerns that the trade wars could lead to a global recession.
Better economic data was also a boost to sentiment with jobs being added in the private sector and there was also improved activity in the service sector.