The NFP And Other News

The NFP And Other News

The NFP And Other News

 

Good Morning

So the court don't like the idea of the government going it alone when it comes to Brexit – and there's going to be plenty of debate as to whether the ruling is or isn't democratic, depending on which way you voted in the first place, but we are where we are and the Pound breathed a sigh of relief, so it's not all bad. For the most part people that voted out should be happy the process hasn't derailed and Theresa May think end of March is still achievable, and people that voted remain, at least it looks like the situation will be more measured, controlled and visible as we go into the negotiation phase with Europe.

Of course, there are plenty of other ways that this could play out and there are theories we could end up in a constitutional crisis if this gets stuck in parliament, but I think we'll have to cross that bridge when we get there, or at least start getting slightly closer to it.

Mark Carney, as always, was a cool customer when it came to the questions thrown at him by the press following the Bank's unanimous decision to leave rates and the QE package unchanged this month. Mr. Carney said that it was very much the markets taking a view on Brexit that had led the Pound to such lows and the Bank remains unchanged in its feelings that over time uncertainty will creep in (and that yesterday's vote adds uncertainty) and this will affect business investment, which in turn affects employment gains, wage rises and ultimately the nation's productivity.  

There's an interesting piece in the Spectator over Mark Carney and Theresa May's relationship. It's too long to summarize, so would say it's worth spending five minutes on.

Mexico is working on a contingency plan for a Trump victory, according to an article in the Guardian. With the Trump momentum growing in the closing stages, there's a very real risk that the Peso will see a sharp sell-off in the markets and there would be a collapse of inward investment because of the amount of uncertainty around the relationship with their largest trading partner. Mexico's central bank has swap lines with the US, so they won't run out of Dollars to sell to buy Pesos if they want to attempt to prop up the currency, but the will of the markets would be difficult to stand up to, particularly as Trump has been (for once) fairly unambiguous around his intentions. The Peso has lost 2.5% since last Friday's Clinton FBI drama, with the top to bottom move this year already 13%.

America could be facing quite the economic challenge from a regional trade deal that China has been working on, according to a White House study. The Regional Comprehensive Economic Partnership (RECAP) is going to reduce import tariffs on Chinese goods across the Asian region, making American goods comparatively more expensive. This report increases the pressure on Congress to pass the seemingly unpopular Trans Pacific Partnership trade deal between the US and 11 other countries.

We don't think we've heard either candidate talk about economic data in any of their campaign speeches, but today is their last opportunity, with the release of the Non-Farm Payrolls. The numbers, for what they're worth are expected to be an improvement on last month, though we're more interested to see how little the market cares about what would normally be such an important piece of information!

Have a great weekend

©Hamilton Court FX

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