Overview
- Sterling slumps after Theresa May’s abilities are brought into question
- Dollar climbs on US tax reform hopes
- Disappointing earnings reports send equities lower
European Markets
The pound dropped after reports that a group of Conservative lawmakers have arranged to sign a letter of no-confidence in British leader Theresa May.
Sterling fell 0.7% against the dollar on Monday, and 0.7% against the euro. London’s FTSE 100 is 0.35% lower as losses are cushioned by the weaker pound.
Meanwhile, the euro is slightly higher against the dollar, at $1.1665.
European equities are trading lower as a risk-off sentiment spreads across stock markets. The eurozone’s proxy, the DAX 30, is 0.9% weaker and France’s CAC 40 is 1% lower.
US Markets
The dollar edged higher amid hopes that Congress have made progress on US tax reform. The dollar is 0.3% higher against a basket of currency pairs.
The prospect of an injection in fiscal stimulus was not enough to support equity markets, which are being dragged lower by the wider bearish sentiment.
The S&P 500, Wall Street’s proxy, has given up 0.24% of its gains, while the Dow Jones is 0.34% weaker.
With a plethora of US news due to be released this week, there could be a change in investor mood. US inflation, Federal Reserve member speeches as well as Building Permits are all on this week’s agenda.
Asia-Pacific Markets
Hong Kong equities were stand out performers overnight amid a weak Asian session. The HSI added 0.2% to its value, while most other Asian indices fell.
The Japanese yen added 0.2% against the dollar and 0.16% against the euro as the risk-off attitude in equity markets translated to demand for safe-haven assets.
Commodity Markets
Oil markets continue to be dictated by the Saudi Arabian purge, however is dropping from recent highs.
Brent oil, the international benchmark, has retreated by 0.33%, while the US benchmark, crude oil, has given up 0.14% of its gains.
Demand for gold has increased by 0.22% as investors plunge bullish bets into the safe-haven commodity amid lower stock valuations.
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