Weekly Financial Notes

by Admin on February 19, 2016

Each week we will be posting the latest news from the financial markets so that our clients can keep abreast of changes and speculation which may affect their property investment plans.

UK

Brexit fears still loom

There was no economic data released to speak of yesterday with the market being mostly driven by fears of repercussions of a “Brexit”.

The FTSE 100 closed 1 percent down yesterday as concerns over the potential impact of Britain’s exit from the EU weighed in. Prime Minister David Cameron held ‘now or never’ talks in Brussels yesterday at the European Union and they continue today, with the Cameron keen to reach a deal soon and hold a referendum as early as possible in June 2016. Opinion polls over the past year have shown a majority of voters will be in favour of remaining within the EU, however, the lead has narrowed in recent months.

In trading yesterday, Sterling made modest gains against both the US dollar and euro before retreating back towards the end of the session.

The lack of data continues today with Retail Sales and Public Sector Net Borrowing being the only releases of note.

EUROPE

Euro monetary policy to loosen

Once again, the euro was unable to consolidate the gains it has made against the pound, seeing it revert to levels around 1.2900 interbank (IB). Despite releasing current account data significantly above expectation at 25.5 billion, the single currency was unable to stem the negative sentiment released in the European Central Bank (ECB) minutes.

The ECB announced it was unanimous in concluding that their monetary policy needed to be revived and reconsidered. Further to this, they stated “where risks are predominantly on the downside and new downside risks are emerging, it would be preferable to act pre-emptively, taking emerging risks into account, rather than to wait after risks had fully materialised”.

The reason this is somewhat surprising is many would have expected the dovish tones of loose monetary policy to have had much more significant effects in the market seeing multi-cent moves that have been the case of late.

 

Please note all speculative data is opinion based and gathered from some of the market leaders in currency exchange. R&R Ibiza will not be held responsible for any losses incurred as a result of the opinions stated or following the advice given.

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