Brexit concerns back to haunt sterling while indices remain broadly quiet

The FTSE 100 is five points lower in afternoon trading, while sterling drops back against the euro as Brexit concerns resurface. 

It has been another day where stock markets aren’t particularly keen to go up, and those that are in the red are only seeing some modest profit-taking. Wall Street opened with small gains, as US traders continue to play the waiting game ahead of CPI data tomorrow. European markets have shown a touch more downside, with the likes of the Dax slightly skittish sitting at record highs, in case the ECB meeting does prove to be more exciting than anticipated. Still, it looks like the lack of volatility could be with us for quite some time yet, perhaps even up to the Jackson Hole meeting in late August. Notably, years like 2021 that have enjoyed strong gains for the first five months of the year don’t tend to see much summer volatility, but instead drift slightly higher until Q4, so if history is any guide 2021’s quiet nature seems set to continue. 

Brexit worries are back as the UK and EU square up over northern Ireland, but while the debate has yet to reach the front pages of most UK newspapers the pound is coming under some pressure against the euro. While the discussions will lack the excitement of ‘deal or no deal’ from 2019, it is still something that could spark some volatility in an otherwise-quiet period.