Article / 09 June 2016 at 2:30 GMT

Brexit: UK industry reveals its hidden strength

APAC Sales Trading Desk / Saxo Capital Markets
  • GBP largely unaffected overnight, with little signs of volatility
  • UK ten year yield closed at record low of 1.253%
  • UK manufacturing numbers show a 2.3% rise, defying all expectations

By Saxo APAC Sales Trading

The GBP is settling at the middle of the range made from the 100 and 200 Day Moving Averages with very little activity. The volatility levels in GBP are unchanged and it is trading close to the highs of the year.

  • UK Rates: European Rates continue to be offered and the UK 10-year yield closed at record low 1.253%, the UK 30 year yield at YTD low 2.091%.
  • Equities: Commodities stocks, up around 4%, helped by the rally in oil are holding up the FTSE for now which finished only 0.3% up despite that.
  • InterContinental Hotels led the fallers, down 2.31% to £26.66, followed by Dixons Carphone which slid 2.2% on the day, closing at 423p. Substantially bigger drops came among the smaller cap companies.
Research: UK Industrial Production was much better than expected at 2% month-on-month (expected. 0.0%) and 1.6% year-on-year (expected -0.4%).

 Golden pill: Pharmaceuticals have been central to the UK's export growth. Photo: iStock

Manufacturing was up 2.3% (expected -0.1%) and 0.8% year-on-year (expected -1.5%). The main driver was the pharmaceuticals sector, where exports helped lift output 8.6%.

Growth was almost three times that recorded in Germany, while in Spain it was flat.

-- Edited by Adam Courtenay

Saxo Research on Brexit. Check out our website for trade strategies, comments and research here


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