Carney: Britain better prepared for no-deal Brexit
|Company results lift FTSE
A slew of earnings with mixed results nudged the FTSE higher this morning with changes in US regulation set to benefit tobacco makers, while the weaker pound is helping the food industry. DS Smith’s planned unit sale and Paddy Power’s decline in net profit also added to the mix.
European car makers under pressure
While the FTSE is holding above the red line, the DAX and other European gauges are under pressure, feeling the drag from the car industry. Just how fragile the industry has become is clear from a swift and substantial selloff in a small German car parts maker triggered by the company describing the business environment as extremely challenging. Various winds are buffeting car producers from different sides: because of a weaker domestic economy Chinese consumers are buying fewer expensive cars like BMW and Mercedes, the threat of Brexit is hindering sales into the UK and Trump’s import tariffs are making the US market less accessible.
Carney: Britain better prepared for no-deal Brexit
Britain is now better prepared for a no-deal Brexit than a few months ago and if the abrupt departure from the EU still materializes it may end up being a disorderly event rather than a disruptive one, according to BoE governor Mark Carney. Briefing a House of Lords committee yesterday he said that authorities have taken steps to protect derivative markets, reduce financial risk and minimize trade frictions.
Sterling traders seem to be echoing that view with the pound trading above $1.31, although the currency did weaken this morning against both the dollar and the euro. This weakening process, however, has more to do with a longer term economic outlook for Britain and the current level of inflation that remains above the BoE’s target than with Brexit. Carney noted that investors had not priced in enough monetary tightening ahead and that the bank might have to send a clearer signal to the market about the future direction of interest rates.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.