Joshua Mahony MSTA
Scope Markets
- Market indecision ahead of key central bank meetings
- Investors cheer US economic fragility
- GBP rally stumbles after ICM poll
Significant indecision is evident within global stocks today, as the release of data fails to spark any form of directional volatility. With the FOMC and BoJ due to take the stand once more tomorrow, there is good reason for today’s hesitancy, given the unpredictable nature of financial markets around these times.
A positive start to the day for US markets does little to reflect what has been a largely discouraging batch of data, revealing falling consumer confidence, weaker-than-expected services sector growth and yet another fall in core durable goods. It is clearly a case of bad news is good news as any signs of a US economic slowdown would likely put the buffers on any plans for the Fed to tighten. However, it is worth considering that there is something wrong about a stock market near record highs amid stuttering Chinese growth, tumbling US earnings, an energy price crisis and inflation at rock bottom.
Just as the pound got into its stride, GBP crosses have been hit by the news of an unexpected Brexit poll from ICM, which pointed towards an exit from the EU in June. The beauty of polls are that they can vary wildly from one week to the next, dependant on a number of factors such as sample size and demographics. What has become evident is that the UK Brexit campaign has been losing support over recent weeks, and thus while today’s result is a shock, it is worth taking such results with a pinch of salt.
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