Morning Commentary: Moving Day

Foreign Exchange - Morning Commentary

Moving Day

Share this story:
Alan Rose
Alan Rose
Foreign Exchange Senior Trader
As we arrive this morning, markets are dealing with headlines that broke a few hours ago that China and the U.S. are pushing their trade summit meeting back to at least April. Despite claims of progress on both sides, apparently there are still a number of key issues that need to be resolved, and it is not clear a summit will even take place at all. This news story has resulted in U.S. equities flipping from positive to negative to positive again; the U.S. dollar (DXY) has strengthened after these headlines against almost all the major and emerging market currencies.
Switching gears away from trade is the somewhat under reported story related to the Brexit vote. We spend a lot of our time focusing on the Brexit negotiations and analyzing the potential ramifications for the U.K., the EU and the British pound as the March 29 deadline approaches.  The politics and the ebbs and flows of the news cycle are all over the map causing the British pound to whip back and forth. But behind the scenes of all the political theater, there is another important story going on that is much more black and white.
That story is the diminishment of London as the top ranked financial center of the world due to all the political, economic, and financial uncertainty surrounding the final Brexit outcome. Banks, insurance companies, asset managers etc. have been putting action and contingency plans in place ever since the Brexit vote back in June of 2016 as no one knew how the Brexit decision was going to be implemented. Last year, London lost its first place global financial position to New York City. Financial institutions (American, European, and Asian) have been migrating services and people out of London to Europe’s secondary financial centers like Frankfurt, Paris, and Dublin over the past two years.
For now, the defections away from London to other centers has been relatively small and while many financial institutions are riding out the storm of uncertainty, some institutions have made other stark choices. Bank of America Vice Chairman, Anne Finucane, said that “Dublin is our headquarters for our European bank now, full stop.” So while we will continue to discuss and write about the continuing story of the Brexit negotiations and the future impact on the GBP, the Brexit vote in 2016 is a stark reminder that there is more to the market than analyzing economic data. The Brexit vote is a reminder of how political choices can lead to economic and financial uncertainty and can impact a nation’s economy and currency.
  • Canadian New Home Prices saw their first yearly decline since 2009 as they fell by just 0.1% YoY. Toronto and Calgary saw the sharpest price declines while Montreal saw slight increases.
  • U.S. Jobless claims for both weekly and continuing claims came in higher than expected and is now sitting at a four-week high indicating that the job and labor market may be beginning to cool. U.S. interest rates are fractionally lower on the session.
If we can help you with any Foreign Exchange needs, please email 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
Non-deposit investment products:
Are not FDIC insured,
Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and
Are subject to investment risks, including possible loss of the principal invested.
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. City National 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 Please do not reply to this email. To ensure the delivery of future emails, please add 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.
Equal Housing Lender
NMLSR ID# 536994 | City National Bank Member FDIC


Popular posts from this blog

Acquisitions or Alliances: What's Your Growth Strategy?