The Pound is on a winning streak
The Pound is on a winning streak, despite the uncertainty generated by an increasingly bleak outlook for the negotiations between the UK and the EU, for a post-Brexit deal. Following yesterday’s positive UK employment data, today was the turn of inflation figures to offer encouragement, coming up at 1.8% year-on-year, exceeding the expected 1.6% and further weakening the case for a Bank of England rate cut. Against all odds, considering the uncertainty generated by Brexit, the British economy continues to give signs of vitality and supporting the pound.
Ricardo Evangelista – Senior Analyst, ActivTrades
Stocks opened significantly higher in Europe on Wednesday after bull traders already set the pace in Asia overnight. Despite a Coronavirus death toll over now over 2,000, market sentiment has been revived on rumours of new measures by China to sustain parts of its economy. China is likely to reduce the negative impact on some of the most exposed companies like airlines, after 80% of domestic flights were halted. However, today’s risk appetite is also being impacted by rising civil tensions in Libya after Tripoli port was bombarded yesterday by forces loyal to Khalifa Haftar. The situation is already significantly impacting oil markets, sending prices higher as fears over supply arise from the conflict. Unsurprisingly, energy shares are performing strongly on the Stoxx-600 index this morning alongside miners to send the market higher, while traders are already braced for a busy day as the British CPI, US Building Permits, US PPI and FOMC minutes loom. The best performance is being registered by the FTSE-100 index where prices benefit from the decline on the Pound Sterling after the EU toughened its negotiation tone with the UK. The market is breaking-out of its 55-period moving average and is currently headed back to 7,485 pts, its first resistance level to be cleared before unlocking a new bullish potential to 7,555 pts.
Chart Source: ActivTrades platform ActivTrader
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