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Global Market Watch - 25th April 2018

The Office for National Statistics (ONS) said that UK income tax revenues were the highest last month for any month of March on record, with the UK budget showing a first full year surplus since 2001/02. This, however, had little effect on the pound which waits for GDP on Friday. On the Brexit front, it was suggested by the EU that “equivalence” could possibly work as an agreement where the UK’s financial institutions could maintain access to European markets after Brexit. However, Brussels would have a “unilateral and discretionary” say over whether UK regulation would be good enough to be considered equivalent.

The German IFO business climate reading slipped below expectations of 102.7 and came in at 102.1 encouraging more Euro sales in early London trading. IFO economist Wohlrabe said that he did not see the April survey result as a change in trend for the German economy, more that the 5th drop in a row is a sign of normalisation. ECB’s Villeroy warned about US protectionism and the Euro slipped a touch lower.

In contrast to Germany, business sentiment US consumer confidence was better than expected at 128.7 and supported the Dollar again. US yields traded at 3%, reportedly the first time in 4 years. This was also seen as a positive for the Dollar whilst seen as the catalyst for a US equity market sell off. President Trump also helped as he announced that there was a “very good chance” of a trade deal with China. 

President Trump said that NAFTA renegotiations were “coming along nicely” and, for its part, Canada said that they saw progress on auto rules.

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