World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search


UK Open: Sterling doesn't celebrate Christmas

Sterling not done yet
Sterling price action has gone off a cliff-edge contrary to FX markets usually winding down in the days leading up to Christmas. The incredible surge following a Conservatives landslide victory to 1.35 has all but fully retraced overnight to 1.31, as Johnson’s move to outlaw any extension of the December 2020 transition period deadline amplifies hard Brexit risks.

It seems even though remain and no-deal Brexit risks have been effectively taken off the table – it shouldn’t be understated the mammoth task that lies ahead to push through an EU-UK FTA that spans all the complications that have delayed Brexit for the best part of 4 years. Johnson’s determined focus to keep negotiations within a strict timeline and avoid a “cliff-edge” WTO-style exit poses as a crucial issue for Sterling volatility in 2020.

Scheduled risk ahead
Some interesting data risk in the session ahead. German IFO is due at 8am GMT and is forecast to rebound from the prior month. The question on investor minds for this print is whether it reaffirms the sluggish German manufacturing print seen on Monday and highlights just how unpredictable it is to call the bottom of Europe’s manufacturing malaise. Improvement here in fundamentals coupled with Lagarde’s ECB appointment could see Euro supported into year-end.

There’s also UK CPI and Canadian CPI figures out at later onwards at 8.30am GMT and 12.30pm GMT respectively. UK CPI will likely be drowned out by pending Brexit risks, but is still worth noting given tomorrow’s BoE meeting – the last for the year. With BoC market pricing suggesting little chance of a rate cut out till Q4 2020, we expect the Loonie (CAD) to draw a moderate reaction to any surprise CPI print.

Washington developments
Congress supported by a Democratic majority are poised to impeach Trump. However, we see little market implications beyond that as it’s unlikely the Senate deliver the final blow.

© Scoop Media

World Headlines


Middle East: BCFIF Condemns Growing Pressure On Political Prisoners In Iran

The British Committee for Iran Freedom (BCFIF) strongly condemns the new sentence against the Iranian political prisoner, Mr Saeid Sangar, 47. This sentence against one of Iran’s longest imprisoned political activists follows an ongoing trend of ... More>>

UN SDG: UN Appoints Twenty Eminent Thinkers To Shed New Light On The World’s Greatest Challenges

New York, 21 January 2021 – Twenty prominent personalities, globally renowned for their intellectual leadership in economic and social fields, will form the second United Nations High-level Advisory Board (HLAB) on Economic and Social Affairs, the ... More>>

World Economic Forum: President Xi Jinping’s Speech At Davos Agenda Is Historic Opportunity For Collaboration

– Chinese President Xi Jinping called for both greater global efforts in the fight against an unprecedented public health crisis and a renewed commitment to multilateral cooperation, in a special address on Monday to business, government and civil society ... More>>

UN: Violent Attempt At US Capitol To ‘overturn’ Election, Shocking And Incendiary

A group of independent UN rights experts released ... More>>