Sterling fragile as lack of UK leadership haunts the UK

• AUD - RBA Assist Gov Debelle Speaks
• CAD - Gov Council Member Wilkins Speaks
• AUD - NAB Business Confidence: 7

Sterling remains fragile with political uncertainty flooding the market. GBP/USD and GBP/EUR remain in a short-term downtrend which has the potential to extend lower. The Pound remains completely reliant on the changing outlook for Brexit talks and although a “soft Brexit” has returned back to the forefront, the uncertainty of a leader and government continues to overshadow market optimism. Markets are still waiting to see if Prime Minister Theresa May will resign and if the Tory’s can finalise a coalition deal with the Democratic Unionist Party.

The technology stocks fell greatly across Europe, Asia and the US trading yesterday as the markets closed lower, despite the gains in energy and industrial companies. The two-day loss for Nasdaq hit 3.3 percent, whilst it was the worst day for Apple shares in over a year. It remains unclear as to the reason behind the decline, although economists have questioned whether the decline was a pause or a show of fundamental cracks in the US stock tech market. However, by the time the Asia-Pacific markets opened again this morning it showed signs of easing. 

• GBP - CPI y/y
• USD - PPI m/m
• CNY - Industrial Production y/y

Today, we gain an insight into UK inflation as the CPI, RPI and PPI are all released. The two high tier inflation pieces of data CPI and RPI are expected to remain sticky at 2.7% and 3.5% retrospectively. Across the pond, the US release their producer price index reading, along with the NFIB small business index.