Investors weren’t particularly impressed with Theresa May’s Brexit speech in Florence this Friday.
The Prime Minister really tried to play up how much co-operation is in the interest of the European Union, in order to tackle issues like migration, terrorism and, a bit more tenuously, North Korea. May proposed a 2 year transition where the UK would (obviously) remain bound by EU laws, including freedom of movement (but with the need for EU migrants to register), in exchange for access to the single market during that period, while confirming the UK will pay into the EU budget until 2020. She also urged the EU to be ‘creative’ in its approach to its post-Brexit relationship with the UK, rejecting the Norway and Canadian models that have repeatedly been touted as potential options.
There was a fair amount of movement from sterling during the speech. At one point the pound was down nearly 1% against the euro and 0.7% against the dollar, only to pull back to a 0.1% and 0.5% loss respectively within minutes of May finishing her Q&A. In reality there wasn’t much for the markets to process, with the main forex-driver being the outstanding eurozone PMIs from this morning.
Elsewhere the pound’s decline allowed the FTSE to jump half a percent, taking it back above 7300 for the first time in over a week. The eurozone indices were less chipper, giving up much of their morning growth in the face of the sustained rise by the euro. As for the Dow Jones, the US index dipped another 0.1% after the bell, continuing to retreat from Wednesday’s all-time high.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.