Gloom descends on Europe as G20 ministers ponder US tariff threat
Dollar has choppy session ahead of Fed officials’ speeches, while sterling slips as UK prepares to trigger Brexit process
expected, but stuck to its forecasts regarding the pace of future tightening.
A number of Fed policymakers are due to speak this week — including Janet Yellen,chairoftheUScentralbank.
“While it would be natural to assume that Ms Yellen’s appearance should be the one carrying the most weight, we are very doubtful that her remarks will be useful to markets,” said Anthony Karydakis, chief economic strategist at Miller Tabak.
“She already had ample time just a few days ago to explain her thoughts on the economic landscape at considerable length and share with markets her — and the Federal Open Market Committee’s — way of approaching monetary policy ahead.
“It would be safe to assume that she has nothing new to add just a week later in the context of a generic keynote address at a Fed-sponsored conference onCommunityDevelopmentresearch.”
Meanwhile, sterling slipped 0.4 per cent against the dollar to $1.2342 — and 0.4percentversustheeuroto€1.1495— after news that Theresa May, UK prime minister, would trigger the two-year Article50EUexitprocessnextweek.
“Until now, we can regard the UK economy and politics as having enjoyed a honeymoon period following the June referendum on EU membership last year,” said Divyang Shah, global strategistatIFRMarkets.
“Once Article 50 is triggered, the hard task begins as the EU and UK gather around the negotiating table and divorce proceedings begin.”
The yield on the 10-year UK government bond — which moves inversely to its price — fell 2bp to 1.23 per cent while that on the equivalent-duration US Treasurywasdown2basispointsat2.48 per cent. The two-year US yield was also 2bplowerat1.30percent.
Gold extended its run of gains to a fourth day as the metal rose $5 to a twoweekhighof1,233anounce. Change on day