Morning Market Update – Brexit Puts Pressure on the Pound

Asian Markets

The US President Donald Trump said that he is planning to make amendments to the Republican Healthcare Bill by arranging for a lower drug cost through competitive bidding.  Australia’s Housing Prices went up by 4.1% in Q4.  It would have been a bombshell for the Reserve Bank of Australia to witness a major fall in the private wage price index along with the 1% GDP fall.  This major fall is quite a contrast to the RBA’s conjecture that wage growth is not going to ease further.

As told by APRA Member Mr. Wayne Byres, we should look out for any talks about Australia’s housing prices due to the humongous pressure mounting for macro-prudential controls. The Reserve Bank of Australia’s minutes of meeting for March got released with the key feature being view around housing – stating a minor change regarding a statement made by Bullock on financial stability and the performance of the labor market.

The Residential Property Price Index released by the Australian Bureau of Statistics (ABS) previously rose to 1.5% in Q3 with an annual price growth coming up to 3.5%. In Q4, we believe the ABS to show a 2.5% profit with an annual price growth coming up to 6%. With more data coming in, Sydney and Melbourne are clearly leading the price acceleration these days.

Other Markets

The Swiss State Secretariat will release the Economic Forecasts later in the day. Moving on for the day, we have the Sterling growing weaker from its fall yesterday. Prime Minister Theresa May will provoke Britain’s exit with the European Union (EU) on March 29, thereby molding the future of the country.

Also, May’s diplomat had already informed the European Council President Donald Tusk regarding Britain’s exit from the EU on March 29 and invoking Article 50 of its Lisbon Treaty. As the date is fixed for Britain’s exit, the pound has come under severe pressure and investors are worried about the situation in the country post the breakup of the UK.

The Consumer Price Index shows some positive signs and we expect the price index to hold the Sterling from breaking down further. The Economic and Financial Affairs Council, the main decision-making body of the Council of the European Union might meet later for the day. This meeting is traditionally hosted by the member states and we expect the EU presidency to put some insight for the Euro. The targeted longer- term refinancing operations from the central bank are rising slowly and forecasted at 62.2B.