Market Brief: Trump and Putin make peace?

17 July 2018

In a remarkable news conference in Helsinki, both leaders challenged the U.S. intelligence community’s conclusion that the Kremlin meddled in the 2016 election.

Today's data releases Key levels
09:00 BoE's Carney at Treasury Select Committee    
09:30 UK labour market report Support
Resistance
14:15 US industrial & manufacturing production GBP/USD 1.3190
1.3300
15:00 US Fed's Jerome Powell speaks GBP/EUR 1.1270
1.1350
Today's data releases Key levels
09:00 BoE's Carney at Treasury Select Committee    
09:30 UK labour market report Support
Resistance
14:15 US industrial & manufacturing production GBP/USD 1.3190
1.3300
15:00 US Fed's Jerome Powell speaks GBP/EUR 1.1270
1.1350

Market overview

President Donald Trump and Vladimir Putin met overnight with seemingly little impact on investors. In a remarkable news conference in Helsinki, both leaders challenged the U.S. intelligence community’s conclusion that the Kremlin meddled in the 2016 election. Putin said he wanted Trump to win but denied his government had done anything to help the then-candidate. A growing number of Republican lawmakers harshly criticized President Donald Trump’s performance at a Monday news conference with Russian President Vladimir Putin, with House Speaker Paul Ryan saying that Russia must be held accountable for meddling in the 2016 election.
 
U.K. Prime Minister Theresa May’s Brexit strategy is in disarray after she infuriated pro-European Tories by bowing to pressure from their Eurosceptic colleagues to re-write her plans. May’s majority was cut to just three votes after she adopted Brexiteer amendments to a key piece of customs legislation, and the proposals were narrowly voted through the House of Commons late Monday. A tenth member of her government is reported to have quit in order to vote against her and she needed the backing of three rebels from the opposition Labour Party to win.
 
Escalating trade tensions are threatening to derail a global upswing that is already losing momentum amid weaker-than-expected growth in Europe and Japan as financial markets seem complacent to the mounting risks, the International Monetary Fund warned. The IMF kept its global forecast unchanged Monday in the latest update to its Global Economic Outlook. The world economy will grow 3.9 percent this year and next, said the Washington-based fund. The pace this year would be the fastest since 2011. 

The day ahead

Looking at the day ahead then, we have the UK June employment report in the UK and in the US we've got June industrial and manufacturing production prints along with the July NAHB housing market index release all scheduled. Away from data Fed Chair Powell will deliver his semi-annual testimony to the Senate Panel in the afternoon, while before that, BoE Governor Carney and various colleagues provide evidence to the Treasury Select Committee on the recent BoE Financial Stability Report at 09.00. 

Thought of the day

Today is a big day for any City working amateur athlete. At 7:15pm this evening the Standard Chartered Great City Race - a unique 5km corporate running challenge which takes place around the closed off streets of the City of London - gets underway. With last year’s winning time coming in at a cool 15:31, needless to say there are some serious runners taking part - a number of wh actually work here. Investec will be looking to improve on a controversial second place in the men’s team event last year (where the top 4 runners times are combined), recording a total time of 1hr 7 min or an average of 16min 45sec per runner, we were pipped to the post by a strong JP Morgan side. Although the 5km road race is toward the low end of endurance running it still requires a consistent and disciplined training schedule and, just like the FX markets, there will be number of hurdles to overcome in order to be successful. The biggest of these hurdles effecting FX rates right now is undoubtedly the ever changing political landscape in the UK. To discuss ways to successfully navigate this, give the Dealing Team a call today on 020 7597 4000 and let us create a unique hedging strategy designed specifically for your business. 

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