Sterling rallies as Scotland votes No to independence

Friday, September 19, 2014

Scotland voted ‘No’ to independence after voters decided to stay in the United Kingdom by 55% to 45%. According to official data from BBC, with 31 out of 32 council areas having declared after Thursday's vote, the 'No' side has an unquestionable lead of 1,914,187 votes to 1,539,920. The turnout hit record high levels, at 84.48%. The GBP rallied strongly following the announcement and hit a 2-year high against the euro at 1.2804 and a 2-week high against the USD at 1.6525. Sterling gave back part of earlier strong gains and held strongly around 1.6450 against the USD.

GBPUSD Spot

GBPUSD Curncy (GBP-USD X-RATE)  2014-09-19 08-22-10

The London equity benchmark index opened the trading session fairly strongly, surging more than 0.6% in early trading. RBS reported it would keep its headquarters in Scotland following the “No” vote. European equity markets followed the uptrend this morning and posted strong gains. Germany’s PPI fell to -0.1% m/m in August, in line with expectations.  

GBPEUR Spot

GBPEUR Curncy (GBP-EUR X-RATE)  2014-09-19 07-32-22

Asian equity markets rallied overnight. The Hang Seng index climbed more than 180 points (+0.75%), while the Nikkei surged by more than 250 points (+1.58%).

Alibaba priced its IPO at $68 per share, at the top end of the range which has been agreed few days ago. According to FT, the pricing means that the ecommerce company which started 15 years ago by a former teacher in a one-bedroom Hangzhou apartment will raise $21.8bn, making its NYSE listing one of the world’s largest and breaking the record for a technology IPO.

Energy: Brent front month futures remained under pressure in early trading this morning around $97.5 per barrel. The WTI front month contract has breached below $93 per barrel, looking for further direction. The fairly bearish oil fundamentals currently weigh on market sentiment, adding further pressure to the oil market. The release of the US leading index data could give further signs of the current US economic conditions. 

Precious Metals: Gold slid lower trading around $1220/per ounce remaining under heavy pressure near its lowest level in 8 ½ months following a strong rally in the global equity markets. Silver consolidated around $18.5 in early trading.

 

Events for today:

 

0700

DE

Aug

Producer Prices

0900

EZ

Jul

Current Accounts

1500

US

Aug

Leading Index

 

LT

Oct  Crude WTI (NYMEX)

OE:

Sep FTSE 100 Index & Equity (LIFFE) 

All times UK Local Time

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