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Pound declines due to Irish boarder issue

  • JPY - SPII y/y: 0.8%
  • GBP - MPC Member Haldane Speaks
  • USD - New Home Sales

The Pound declined slightly after as the risk of the Ireland boarder issue holding up the Brexit talks continues to rise.  The Democratic Unionist Party, which supports Theresa May’s minority Government, disagree as to what the boarder should be. They do not want a boarder which will create barriers when trading with the UK and also do not want to have to mirror EU regulations if the rest of the UK do not. They continue to resist having a physical boarder splitting them and Northern Ireland and believe that NI should have a special status, which could see them operate under EU regulations.

  • GBP - Bank Stress Test Results
  • GBP - BOE Gov Carney Speaks
  • USD - Fed Chair Designate Powell Speaks

The Bank of England released their Bank Stress Test results this morning, looking at whether the UK’s largest banks could continue to lend money in different economic scenarios. All of the banks tests passed, meaning they do not need to strengthen their capital position. This is the first time since the test was launched in 2014 that all of the  tests were passed. This bullish result showed the banks would be able to cope if a no deal Brexit was to happen. Although BOE Governor, Mark Carney did warn in the press conference following, a ‘sharp, disorderly’ Brexit would cause some economic ‘pain’ for households and businesses.

Jerome Powell will testify his nomination as Federal Reserve Chair this afternoon, in front of the Senate Banking Committee. Two FOMC members are also set to speak this afternoon. The first will be William Dudley, who will be delivering the opening remarks at the annual conference on the evolving structure of the US treasury market. Patrick Harker is scheduled to speak at an event hosted by the Federal Reserve Bank of Philadelphia on financial safety for the aging population. The Conference Board Consumer Confidence report will be released from the US. Whilst in Canada, Bank of Canada Governor, Stephen Poloz, will be holding a press conference about the Financial System Review, the BOC is due to release later today.