Sterling slide continues as Brexit fears dominate
|Theresa May have promised a bold new Brexit deal proposal, yet all signs point towards another parliamentary rejection. Meanwhile, crude volatility is heightened amid US-Iran tensions and cracks in the OPEC+ story
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Sterling declines in the face of no-deal Brexit risk
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Will Farage pressure influence Brexit direction?
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Heightened crude volatility amid Iran-US spat and OPEC+ concerns
The pound has been one of the big losers over the past week, with the growing likeliness of a Theresa May exit raising fears of a no-deal Brexit. For all the talk of a ‘bold’ new Brexit offer from the PM, the reports that such a deal would include the Northern Ireland backstop are already leading us to believe she will see yet another failed vote next month. There is little reason to believe that a new leader would find any greater success in putting together a more attractive deal with the EU, and thus markets are aware that the change of leadership will ensure a no-deal Brexit is on the table as Farage breathes down their neck.
Oil prices volatility is taking shape after an interesting weekend. With Donald Trump threatening the Iran’s aggression towards the US would see ‘the end’ of the Islamic Republic, there was plenty reasoning behind the weekend gap higher. However, we are also seeing cracks in the OPEC+ story, with the Russians talking about a potential easing of the output restrictions currently in place. Saudi threats that any relaxing of the current production levels could spark a glut of oil on the market have certainly raised concerns amongst crude traders, with prices falling in early trade today.
Ahead of the open we expect the Dow Jones to open 15 points lower, at 25,749.
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