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March 11th Market Update

With little economic data to be released Friday morning the focus was very much on Brexit with a number of stories doing the rounds.
Sterling was under pressure from the off Friday morning as a result, and with uncertainty growing and the prospect of a deadlock between the UK and the EU ahead the Pound continued to slump over the course of the day.
GBP/EUR closed the day down -1.02% at 1.1569, having opened just shy of 1.1700.
Losses against the US Dollar were however curtailed following weak US economic data in the afternoon. GBP/USD closed down -0.58% at 1.3005.
That poor US data came in the form of the always closely watched and highly scrutinised Non-Farm payrolls (Change in number of people in employment). The Non-Farm print showed the US economy created just 20,000 jobs in February, that was significantly short of the 180,000 expected and down from 300,000 created in January. This data adds to those concerns that the US could be seeing a slowdown in economic activity.
Aside from the headline Non-Farm figure, the other US jobs data was actually quite encouraging with average hourly earnings m/m up +0.4% (+0.3% had been expected) and the overall unemployment rate dropping to 3.8% (3.9% had been expected).
In stark contrast to the poor job creation in America, North of the border the Canadian economy created 55,900 new jobs in February, smashing the meager 600 jobs expected. The overall unemployment rate held steady at 5.8%.

Overnight

Sterling rates already under pressure this morning with a big week ahead for the UK.
As expected with such an important week ahead Brexit related stories dominated UK headlines over the weekend, including:
- With just one day until a crucial and meaningful vote in the commons, a spokesman for UK PM Theresa May has admitted the UK is deadlocked with the EU in Brexit talks.
- Theresa May, in a nod to her Brexiteer colleagues, once again stated that voting against her deal on Tuesday could mean the UK never leaves the EU.
- Both the Times and Telegraph have reported the PM has the support of just two members of her cabinet and is facing calls to resign in order to save Brexit.
German Industrial Production m/m -0.8% (+0.5% Exp)
German Trade Balance 18.5Bn (21.2Bn Exp)
Japan Prelim Machine Tool Orders y/y -29.3% (-18.8% Previous)
China CPI y/y 1.5% as expected

Today

Brexit related stories likely to drive Sterling rates.

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