Article / 13 November 2017 at 8:00 GMT

Morning Markets: Rumoured Tory plot to oust May hits GBP

Senior Editor / Saxo Bank
Denmark






chart

 

Watchlist

  • Portugal: CPI (11:00 GMT)
  • Russia: GDP y/y (13:00)

Rumours that some 40 conservative MPs have signed a call for a no-confidence vote in Britain's prime minister, Theresa May, have slammed into sterling, sending it sharply lower against the dollar, among others. This rumoured plot comes after worries that Britain might crash out of the European Union without a Brexit deal in 2019, intensified over the weekend. Michael Barnier, the EU's chief negotiator, said the bloc was preparing contingency plans for this eventuality and "European governments and business should 'get prepared' for a no-deal Brexit scenario", the FT reports. 


In Ireland, which is uniquely exposed to Brexit and trade with the UK, the country's leader, Taoiseach Leo Varadkar, said he remained confident that a deal would be struck but also warned that Ireland would need to make provisions for a possible over-the-cliff Brexit.


In Asian markets overnight, the Nikkei 225 took another worrying tumble, and with the rest of the Asia Pacific region forging ahead with a trade deal while the US heads in its own protectionist, isolationist direction, this is hardly a time for optimism. Following the Asian losses and a weak Wall Street on Friday, European equities are likely to open in boggy ground.


On the data front, the calendar has little of interest save Portuguese CPI and Russian GDP, but things will pick up later this week with top-tier releases including Japanese and German GDP on Tuesday and UK labour market figures on Wednesday.


Market signals

Asian session

  • Doubts about tax cuts ended an eight week-long stretch of gains on Wall St
  • Japan's Nikkei 225 closed down by a hefty 1.32% at 22,380.99
  • The sharp fall in the Nikkei 225 is a worrying sign of ongoing volatility in equities
  • Korea's Kospi Composite lost ground too; it closed down 0.50% at 2,530.35
  • Alibaba says shoppers splurged $25.5bn online on Singles' Day on Saturday
  • Shares in gaming firm Razer soared 30% on its debut on the Hong Kong Stock Exchange
  • Leaders from 21 Asia Pacific economies met at the APEC summit on November 10 to 11
  • Talks aimed at reviving the Trans Pacific Partnership were held at APEC
  • A watered-down trade pact with fewer members, TPP 11, will take effect in 2019
  • Saudi Arabia has called for an urgent meeting among Arab League ministers on Iran
  • Uber is on the verge of reaching an agreement to sell a stake to Japan's SoftBank
  • The S&P/ASX200 closed down 0.13% at 6,021.80; it was weighed down by two banks
  • Amazon says it will launch in Australia with a full retail and marketplace offering

Forex ahead

  • Domestic political instability is weighing on AUDUSD; it was worth 0.7663 at 0536 GMT
  • Pressure on PM Therese May over poor progress in Brexit talks is weighing on the GBP



In opinion

Heading into the red
Asian equities look set to fall as the week gets underway, with no sign of any easing in the recent surge in volatility, says the team at Saxo Capital Markets Australia.

Trade pact
Eleven countries have agreed on 'core elements' in a regional trade pact from which the US pulled out earlier this year, writes the team at Saxo APAC Sales Trading.

Catalyst watch
As 2017 draws to a close, we focus on likely upcoming catalysts, such as Federal Reserve events and the US tax plan, writes Kay Van-Petersen in his regular Macro Monday column.


nnn














Talks aimed at reviving the Trans Pacific Partnership without the US were held on the sidelines of the APEC summit in Danang,Vietnam. Photo: Shutterstock

Morning Markets goes out on the TradingFloor platform at 0800 GMT, Monday to Friday.
Click here
to make sure you're up to date with the latest developments.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail