Intraday Market Thoughts

GBP Maintains Momentum above 1.30

by Adam Button
Jan 23, 2019 15:06

For the 4th straight day, the British pound is the strongest currency of the day, this time amid remarks from Labour's shadow chancellor indicating that the Boles-Cooper amendment/proposal to stop a no-deal Brexit are likely be backed by Labour. More details on the amendment here. Indices recover half of yesterday's losses after reports of cancelling US-China talks were denied. The Premium long in cable is currently over 180 pips in the green. A new Premium trade will be posted before the close of the London's stocks session.

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GBP Maintains Momentum above 1.30 - Performance 23 Jan 2019 (Chart 1)

Global indices are rallying back following last night's pullback emerging on the heels of an FT report that the US had cancelled a preparatory trade meeting with Chinese officials. That sent USD/JPY as low as 109.16 before later rebounding to 109.40 when White House advisor Kudlow denied the report. USDJPY is now at

S&P 500 is up 15 pts after having closed down 34 points on Tuesday in a reminder of how sensitive markets will remain to trade troubles. 2600 remains a key support and the index is likely to retest 2680. At the same time, US existing home sales were a reminder of troubles at home after a 6.4% m/m decline in December; much worse than the -1.5% consensus.

Chinese growth also remains a key concern with the IMF lowering its forecast to 6.4%. That's in-line with expectations but a reminder that the pace is headed in the wrong direction.

NZD resumes Wednesday's gains after NZ inflation rose slightly faster than expected and gave the kiwi a 30-pip boost. CPI rose 1.9% y/y in Q4 compared to 1.8% expected. Core measures also rose at a faster pace than Q3. The market is trying to figure out whether the RBNZ will cut rates this year but the implied odds fell to 42% from 50% after the numbers.

Act Exp Prev GMT
CPI (q/q)
0.1% 0.0% 0.9% Jan 22 21:45

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