Morning Commentary: The Global Economy – Uncertainty Abounds

Foreign Exchange - Morning Commentary

The Global Economy – Uncertainty Abounds

Share this story:
Facebook
Twitter
LinkedIn
Email
Alan Rose
Alan Rose
Foreign Exchange Senior Trader
The global economy continues to show signs of a slowdown coupled with much continued uncertainty surrounding the Brexit vote, U.S.-China trade talks, a U.S. government shutdown, etc. Yet despite all these ongoing concerns, global investors have stopped pushing the panic buttons as global equities have found a near term base and are stabilizing partly due to the sharp correction lower in G7 interest rates.
 
The British pound is a good example of this most recent phenomenon. Another key vote regarding Brexit takes place in Parliament much later today. The outcome of a defeat for PM May seems to be completely baked into the price…only the magnitude of the loss will be of interest to the market at this time.
 
Yet the market seems to find solace and comfort in a reasonable loss in today’s Parliamentary vote as it will remove the likelihood of Britain crashing out of the EU or a vote of no confidence for PM May. A loss within market expectations potentially paves the way for concessions that could ultimately lead to a “soft” Brexit before the March deadline. For those that follow the British pound, expect a lot of volatility and erratic price action after the Parliamentary vote, but barring a PM May resignation, the British pound would appear to be building a base of support.
HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT:
  • China’s government and central bank pledged to provide more support for growth to counter the economic slowdown. This will continue to include tax cuts and lower interest rates; Asian equities responded positively to the headlines while European and U.S. equities are trading sideways.
  • Germany reported GDP for 2018 and it came in weak at 1.5% compared to the 2.2% in 2017. Q4 was particularly weak in 2018 bordering on zero growth; this was the weakest GDP for Germany in the past five years.
  • U.S. Empire Manufacturing came in much weaker than forecast at 3.9 against expectations of a print of 10.0. This is the lowest reading since mid-2017 and reflects a lack of new orders. U.S. PPI for December was weaker than forecast at -0.2% and is the first decline in a year. PPI for the year remained unchanged at 2.5% and ex-food and energy also remained unchanged for the year at 2.7%.
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:
Facebook Twitter LinkedIn Google Plus YouTube
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 ©2019 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
Equal Housing Lender
NMLSR ID# 536994 | City National Bank Member FDIC
                                                           

Comments

Popular posts from this blog

Acquisitions or Alliances: What's Your Growth Strategy?