Brexit resurfaces as Sterling has flash crash
Markets were travelling along pretty smoothly until Friday morning when the British Pound had a "flash crash". In a matter of seconds, the Sterling fell more than 6% before recovering about 4%. The shock drop quickly refocused the market’s attention from the bank issues in Europe to Brexit.
The falling Sterling has helped cushion the UK economy against the adverse effects of Brexit. Indeed, in the short term we may even see UK GDP growth pick up as export services like banking and tourism prosper under a lower Pound.
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Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
Published on 11 Oct 16
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Markets were travelling along pretty smoothly until Friday morning when the British Pound had a "flash crash". In a matter of seconds, the Sterling fell more than 6% before recovering about 4%. The shock drop quickly refocused the market’s attention from the bank issues in Europe to Brexit.
The falling Sterling has helped cushion the UK economy against the adverse effects of Brexit. Indeed, in the short term we may even see UK GDP growth pick up as export services like banking and tourism prosper under a lower Pound.Sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
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Venezuela tension heats up
Duration 03:16
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Aussie dollar surprises market
Duration 03:10
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Markets climb as investors watch US healthcare bill
Duration 02:31
The falling Sterling has helped cushion the UK economy against the adverse effects of Brexit. Indeed, in the short term we may even see UK GDP growth pick up as export services like banking and tourism prosper under a lower Pound.
Friday’s "flash crash" stole the limelight from the US, where the employment report failed to attract its usual level of interest, particularly given it offered little in the way of fresh insights into the outlook for interest rates.
The increase in the labour force backs up the US Federal Reserve’s argument that there is still plenty of "slack" in the system. However, the uptick in the unemployment rate will not be enough to change the Fed’s current course to raise rates in December. A November hike, however is still probably off the table.
Australia had a pretty good week of data last week and it appears that GDP growth is continuing to accelerate. This included a better-than-expected rise in Australian retail sales which was the largest monthly rise since January.
Also the Australian trade deficit narrowed in August, showing the benefit of the recent increase in commodity prices - especially coal - to the Australian economy.
A bunch of data is due out of China this week including trade data, inflation figures and lending. We expect the reports to show signs that external demand may be slowly improving. This would be in line with the increase in the Baltic Dry Index. The Baltic Dry Index is a composite measure of the cost of shipping dry bulk commodities such as coal, iron ore and grains – by sea, and is a relatively timely indicator of world trade volumes.