The pound’s May-inspired rebound has continued this morning, rendering the European indices inert.
Still dining out on the news that the PM has promised MPs a debate on the terms of the Brexit, sterling has surged nearly 1% against the dollar and 1.3% against the euro. It’s only a minor victory for the pound, which is still stuck below $1.225 and barely over €1.11, but given its recent run any kind of growth will do.
The pound’s rebound even withstood a serious of negative dispatches from Bank of England deputy governor. During his testimony in front of the House of Lords EU Financial Affairs Sub-Committee Sir Jon Cunliffe warned of more ‘market induced financial events’, claiming that ‘markets find political uncertainty very difficult’, while admitting that though London’s financial system is complicated enough that it would be hard to replicate in the EU, some jobs and services could well shift to New York.
While the pound caught its breath the European indices found little reason to budge this Wednesday. The FTSE, DAX and CAC all spent the morning flirting with flatness, at most rising or falling around 10 points apiece.
Things look unlikely to change this afternoon, with the Dow Jones futures suggesting a similarly stale start for the US index. Data-wise the Dow only has the JOLTS job openings reading to deal with, though there are speeches from FOMC members William Dudley and Esther George before and after the bell as well as the latest Fed meeting minutes this evening.