Pound traders await Brexit developments
|Dominic Raab, the newly appointed Brexit Secretary, will deliver a statement to the Commons around 1PM this afternoon outlining the Government’s plan for Britain’s future relationship with the EU in an event that will no doubt be keenly followed in the markets. The pound is fairly mixed on the day so far, hovering around the 1.32 handle against the US dollar while the FTSE is moving higher after consecutive daily declines.
Sterling delicately poised
After some sizable selling in sterling on Monday, the trade in the pound has been fairly subdued with traders appearing to bide their time and await further information on what the latest political developments mean. The publication of the white paper may well provide more clarity, with the document expected to formalise the government’s standpoint that was agreed upon last week at Chequers. Theresa May’s position remains precarious but the longer the PM can fight off a leadership challenge the more likely a soft Brexit becomes and this would provide support for the pound.
Comcast raises bid for Sky
The best performing blue-chip in London this morning is Sky, with the broadcaster seeing its stock rise further after Comcast have announced an increased takeover offer. The bidding war between Comcast and 21st Century Fox has caused a large move higher in Sky’s share price with the market moving above the £15 level to trade at its highest since 2000. The latest bid of £14.75 per share comes just a couple of days after Fox’s improved offer of £14 per share and attention now turns to Rupert Murdoch’s company to see whether they choose to counter once more.
Oil price suffers largest drop in 2 years
Despite a mammoth drop of 12.6M in the weekly DOE inventory release, crude oil experienced its largest one-day decline in two years on Wednesday largely due to Libya’s export situation improving and rising fears of a trade war between the US and China. Brent crude, has attempted to stabilise today, rising back near $75 a barrel after the IEA (International Energy Agency) warned that spare production capacity risks being “stretched to the limit” on supply disruptions and US sanctions on Iran. The market is now retesting a key technical support region and any further downside in the coming sessions could signal a notable break lower which may lead to price falling back below the $70 level.
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