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Market Snapshot – Pound Drops as May Prepares for New Scottish Referendum

By:
FX Empire Editorial Board
Updated: Mar 4, 2019, 13:24 UTC

The exit by Scotland would not only affect the UK economy in an adverse manner, it is also likely to encourage other parts of the UK,

Market Snapshot

Pound Drops as Worries over Scotland Referendum Emerge Again

The pound seems to be under a lot of stress as it gets hit from all sides and in fact, looks very weak and vulnerable to get hit even more as the hours and days tick by. The reason for the woes of the pound are the rumors surrounding the referendum in Scotland. This is likely to be the second referendum in Scotland asking for independence and of course, the UK government isn’t going to be too happy to know about it.

The exit by Scotland would not only affect the UK economy in an adverse manner, it is also likely to encourage other parts of the UK, including Wales and Ireland, to seek independence as well. The uncertainty is reflected in the pound since morning and as a result, the GBPUSD drop below 1.24 for a brief while. The pound is currently trading at 1.2409, down 0.43%.

Markets in Low Volatility Ahead of Trump’s Speech

European shares are mixed as yields are slightly higher with Treasuries and Bunds modestly lower while Asian sovereigns and European peripherals are slightly higher.

Trading was cautious ahead of President Trump’s State of the Union on Tuesday. Stocks are mixed too with Japan’s Nikkei leading the decliners with a near 1% tumble as JPY rose on risk aversion. U.S. equity futures are nearly unchanged, in line with the FTSE and the DAX. The former is higher as Sterling retreats on reports there could be a second Scottish independence vote could be held as soon as next month after the government triggers Article on Brexit.

Oil Prices Rise as Long Positions Hit Record High

Oil is called higher shortly before the regular session opening. The market appears to be consolidating for a fourth day, but there also seems to be a bias to the upside. Perhaps investors are betting that compliance with OPEC’s plan to cut output will offset some of the increased production in the U.S.

Crude Oil is trading at $56.78 +65 while Brent oil is trading at $56.79, +0.85%.

Natural Gas Prices Drop over 4%

Natural gas futures are trading lower on Monday as estimations of a rising natural gas production affect prices. Baker Hughes reported that the US natural gas rig count fell by two to 151 rigs from the previous week. However, rigs rose 48% YoY. The US natural gas rig count is at the highest level since December 2015.

Natural Gas is currently trading at 2.670, -4.12%.

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