With less than 6 weeks away from the early general election, the UK Parliament has elected labour’s sir Lindsay Hoyle to take over as speaker, following John Bercow’s decision to step down after 10 years of tenure.
Since the referendum vote, Bercow was regularly accused of manipulating the house and blocking proceedings as a result of his said bias towards staying within the EU, so it will be interesting to see if Sir Hoyle faces similar judgements. Much will depend on whether or not the UK has a majority government by the 13th of December.
Both Labour and the Lib Dems are expected to speak today to further elaborate on their positions and begin to chip away at the Tory’s perceived lead in the polls. Corbyn’s promise to be done with Brexit within 6 months is due to resurface whilst Swinson will pledge a £50bn “remain bonus” to public services. At the other end PM Johnson will add further detail on tax cut plans to cement his position at the top.
In the build up to one of the most volatile general elections in the UK’s history, think tank The Resolution Group are expecting Public spending to break multi decade levels with their attempts to gain favour.
European shares rose following a pickup in China’s manufacturing output last week. The Euro’s weakness as a result of the ongoing trade talks between China and US has been well documented since the start of the year and has arguably played a large role in halting it’s growth against its major a currency counterparts.
Many of France and Germany’s automotive and aeronautical multinationals had downscaled their investments as a result of a lot of their subsidiary suppliers being China based. Continued growth then in China’s manufacturing sector might well provide a renewed level of risk appetite in the eurozone too. This was already highlighted during yesterday’s trading, with the manufacturing PMI release across the bloc marginally better than expected. It is worth noting however that Spain was the only exception to this, potentially highlighting the continued unrest Catalan’s ongoing drive for independence is creating. It will be interesting to see if this is reflected in this morning’s employment levels too.
A big factor behind the US Federal reserves consistent caution since the start of the year is the perceived risk associated to the global downturn as a result of the ongoing negotiations with China.
Talks between the US and China seem to be progressing positively however, with a spokesman for President Xi once again confirming they are in continuous communication with Trump. It will be interesting to see how this progress influences data in the build up to the set deadline before the tariffs between the 2 are due to be enforced again (mid December).
Having remained relatively rangebound since the end of October, we could well see a slight price adjustment for Dollar exchange rates during this afternoon’s trading as the latest non-manufacturing survey (PMI) is released.
As expected, the RBA decided to keep their Interest rate on hold at the record low level of 0.75%. The markets have reacted favourably so far this morning however, with optimism from the Governor driving investor appetite.
Lowe pointed towards the pick up in housing prices and indeed global demand for natural resources as reasons for long term growth, with the RBA still holding out for 3% growth in the economy by 2021. As a result, it will be interesting to see if Lowe’s confidence is reflected in this evening’s Trade balance release.
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