Morning Commentary: “Keep Calm and Carry On”

A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.

“Keep Calm and Carry On” Share this story: Alan Rose Foreign Exchange Head Trader

The stereotype of the British people is that they keep a stiffer upper lip, persevere through the most difficult of times and maintain their poise, dignity and self-control. PM Theresa May is doing her best to mirror those qualities through the most difficult of times as an internecine warfare and party rebellions are breaking out within her Tory party.   What is happening in the U.K. is no different than what happens here during heightened political times as political posturing, bravado, and bluster allow politicians to stake out the easy ground before having to make a difficult decision that weighs upon the national interest above local politics. This is not to say that PM May will get the votes she needs from her cabinet, the Tory party and Parliament to withstand a challenge and a potential vote of no confidence, but she is maintaining her poise, carrying on and not succumbing to the calls of stepping down.   Overnight, two cabinet members have decided not to resign and the markets are reacting in a positive manner for now.  U.K. interest rates have clawed their way to higher levels after the emotionally charged overreaction yesterday and the British pound has stabilized and is back in the middle of yesterday's volatile and frantic range. There is much at stake for the U.K. economy regarding the continued tenure of PM May and the outcome of the Brexit negotiations – continue to expect volatile times ahead.   Factoid: despite all the political and economic uncertainty surrounding Brexit and the ultimate state of the U.K. economy, Boeing just opened up its first European factory in the U.K. last month. It is most interesting to note that they could have set up anywhere in Europe but chose the U.K. during these uncertain times. HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT: U.S. Industrial production for October was slightly weaker than consensus rising by only 0.1% with a downward revision to September from 0.3% to 0.2%. U.S. interest rates are opening lower again today (10-year rates are down for the fifth straight day) causing the U.S .dollar to weaken.

If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133. Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!

Follow City National Bank on social media:

Investment and Insurance Products: • Are Not insured by the FDIC or any other federal government agency • Are Not deposits of or guaranteed by a Bank or any Bank Affiliate • May Lose Value This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. The Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.

Unsubscribe from this list  |  Update email preferences This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list. Copyright ©2018 City National Bank – All Rights Reserved. 350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071 City National Bank is a subsidiary of Royal Bank of Canada. TERMS & CONDITIONS  |  PRIVACY STATEMENT NMLSR ID# 536994 | City National Bank Member FDIC