LAST WEEK – KEY TAKEAWAYS

US: Trade optimism and strong earnings boost shares

• Optimism about progress in trade tensions (see below) and better-than-expected corporate earnings helped US shares hit another record high;
• Meanwhile, figures released last week showed the country’s trade deficit- the difference between the volume of goods it imports and exports- shrunk and growth in the services sector beat forecasts in October, but productivity fell in the third quarter.

• Omnis view: A trade resolution would boost sentiment, and although c...

LAST WEEK – KEY TAKEAWAYS

UK: General election set for 12th December

• Sterling strengthened against the US dollar as MPs overwhelmingly voted to hold a general election on 12th December once they were satisfied that the risk of a ‘no deal’ Brexit had been averted;
• At the start of the week, the government accepted the EU’s offer of an extension to the Article 50 deadline until 31st January.

• Omnis view: The Conservative party has a sizeable lead in the opinion polls ahead of the election which would give the Prime Minister the parliamen...

LAST WEEK – KEY TAKEAWAYS

Brexit: Parliament backs withdrawal deal but rejects Boris’ timetable

• UK shares rallied and sterling strengthened against the US dollar after the House of Commons backed the Prime Minister’s Brexit withdrawal deal;
• However, sterling handed back some of those gains after MPs voted against Boris’ plan to rush the legislation through Parliament so the UK could leave the EU on 31st October;
• Boris then said he would give MPs until 6th November to approve the deal if they agreed to hold a general election on 12th De...

LAST WEEK – KEY TAKEAWAYS

Brexit: UK and EU agree withdrawal deal

• The pound hit its highest point in five months against the US dollar as the UK and EU agreed a Brexit withdrawal deal, although it handed back some of those gains when the Democratic Unionist Party (DUP) said it would oppose the deal;
• The government cancelled a meaningful vote planned for Saturday after MPs backed an amendment designed to avoid an accidental ‘no deal’ Brexit;
• The Prime Minister consequently had to request a delay to the Article 50 deadline, but he did no...

LAST WEEK – KEY TAKEAWAYS

Brexit: Possible breakthrough on Irish border

• UK shares rallied and sterling strengthened against the US dollar as the prospects of a last-minute Brexit deal improved;
• The Prime Minister and his Irish counterpart said they could see ‘a pathway to a deal’ after meeting on Thursday, and the EU agreed to hold intensive talks with the UK over the weekend;
• Meanwhile, the UK economy grew by 0.3% in the three months to August, up from 0.1% in the three months to July1.

• Omnis view: The chances of the two sides agre...

LAST WEEK – KEY TAKEAWAYS

Brexit: Prime Minister proposes alternative Irish border plan

• Sterling held steady against the US dollar as Prime Minister Boris Johnson submitted his plan to replace the Irish backstop in the Brexit withdrawal deal;
• The proposal involved Northern Ireland staying in the single market- which means it would be subject to EU regulations covering goods, agriculture and food- but leaving the customs union so it could benefit from any trade deals signed by the UK.

• Omnis view: The EU rejected the proposal and gave ...

LAST WEEK – KEY TAKEAWAYS

UK: Supreme Court rules against Boris

• Sterling weakened against the US dollar despite the UK Supreme Court ruling that the suspension of Parliament for five weeks- known as proroguing- by the Prime Minister was unlawful.

• Omnis view: Political uncertainty remains elevated. The government is legally bound to request another extension to the Article 50 deadline if the two sides fail to agree a withdrawal deal by the EU summit on 17th October. However, Boris continues to insist the UK will leave the EU on 31st Oc...

LAST WEEK – KEY TAKEAWAYS

US: Federal Reserve cuts interest rates

• US shares rallied as the Federal Reserve- the US central bank- cut interest rates by 0.25% for the second time this year due to subdued domestic inflation (the rate at which prices increase) and concerns about the global economic outlook;
• US President Donald Trump criticised the board for not lowering rates by a wider margin.

• Omnis view: The Federal Reserve signalled that rates would not change again for the foreseeable future, which may lead to further clashes with Pr...

LAST WEEK – KEY TAKEAWAYS

UK: Brexit developments and rebounding economy boost sterling

• Sterling strengthened to its highest level in two months against the US dollar as the prospect of the UK leaving the EU without a deal appeared to fade;
• The Speaker of the House of Commons said he would allow MPs to do whatever is necessary to prevent a ‘no deal’ Brexit, while media reports suggested the Democratic Unionist Party (DUP) may permit regulatory checks on goods crossing the Irish sea to help the Prime Minister reach an agreement with the ...