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POLITICAL RISK HOUNDS THE POUND

POLITICAL RISK HOUNDS THE POUND

So it seems like David Cameron’s scare tactics have worked, for the time being at least, as further to the economic apocalypse that was predicted with the help of RBS, Standard Life and BP, the no vote regained some momentum for the first time since the beginning of August. This has settled the markets somewhat but it would be churlish not to expect more twists and turns before next Thursday’s vote.

 

Elsewhere in the world, new sanctions are being imposed on Russia by the EU. These were approved on Monday but only implemented yesterday and although these could be removed as early as next month, we await Russia’s reaction. The interesting part of this is that the sanctions hit the Euro economy, and especially the German one, as hard as it hit the Russian economy.

 

Mario Draghi was speaking in Milan yesterday and calling on the Eurozone governments to take forceful action to spur investment.  Comparing Europe to the US, Draghi said that “the level of business investment in the euro area has only slightly improved since 2008, whereas in the US it is above its pre-crisis level. We will not see a sustainable recovery unless this changes”. There will be more Mario words today so we will see what impact they have.

 

There is a bit more data out today and the main figure to look out for is US retail sales. There is also Michigan consumer confidence and from the Eurozone we have the unemployment change and industrial production.

 

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