The pound has continued lower this morning as the UK and EU remain a long way apart on the issue of the Irish border, and there's little sign of a solution anytime soon. A letter from UK PM Boris Johnson to Donald Tusk, president of the European Council, has been seemingly rebuffed with the initial unofficial response from Brussels a mixture of disdain and disbelief. The latest effort from Boris to persuade the EU to move their lines on the Irish border has fallen on deaf ears and given the ardent belief each party has in its respective view it's becoming increasingly hard to envisage a way out of the current impasse. The pound has sunk back below the $1.21 handle and remains not far from its lowest level in more than 3 decades!
FTSE extends recovery
There's been more gains seen in blue chip stocks in London, with the FTSE rising to its highest level in 4 sessions after dropping to a 6-month low last week. A broad improvement in global risk sentiment has helped the benchmark recoup some of the recent declines, but the outlook remains a little fragile going forward. Despite the latest move higher the index remains below last week's high and at the moment the price action looks more like a consolidation after last Wednesday's rout rather than a clear longer term bottom.
BHP announce record dividend
There's been a fairly nonplussed reaction to the latest set of results from BHP after the world's biggest miner announced a pretty solid set of results. The highlight for investors was a record final dividend of $0.78 per share, but even though there was a 2% increase in underlying profits for the past year this missed consensus analysts' forecasts. Shareholders will be hoping that the firm is coming out the other side of a tough few years for mining firms, as cost cutting measures start to bear fruit and rising commodity prices contribute to a more favourable operating environment. The stock is listed on multiple exchanges and in London is trading lower by just over 1% this morning.
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EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
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