- Tuesday was the best day of 2019 for GBPUSD
- Reports of Tory MPs to resign
- Lloyds shares rally after solid update
The pound has dipped back a little this morning as the currency looks to consolidate after its best day of the year against the US dollar, with Tuesday’s gains coming after more solid employment data from the UK and raised hopes of a Brexit breakthrough. The FTSE is trading a little higher on the day, after posting consecutive down days at the start of the week.
The GBPUSD enjoyed its best day of the year yesterday, with the market breaking back above the $1.30 mark. Attention now turns to the latest developments in Brussels as May meets Juncker and any further resignations from the major parties. Source: xStation
More MPs set to break party ranks
As Theresa May heads to Brussels to seek further concessions on the Irish backstop from the EU, a handful of Conservative MPs are expected to quit the party in the clearest sign yet of rebellion against her handling of Brexit. The resignations come hot on the heels of the Labour MPs who broke away from their party, and the former are expected to join the latter in the “Independent Group”. For now, these resignations aren’t game-changing in themselves, although they could make for a lively PMQs this lunchtime, but they may well trigger a sequence of events that would have far greater implications and could feasibly lead to a General Election. This would obviously require an extension of the Article 50 deadline, and even if a GE fails to occur, a delay in the UK leaving the EU is seemingly being priced in as the base-case by the markets and this is providing support to the pound in the near-term.
Lloyds rises after buyback boost
There's been a nice move higher in shares of Lloyds this morning after the bank reported what could be described as pleasing and well-rounded results despite having to set aside yet more funds for PPI claims. Amongst the highlights from the latest trading update were a 24% rise in annual profit and an increase in the share buyback programme to £1.75B compared to £1B last year as well as striking a more upbeat tone than its competitors on Brexit-related risks. RBS and HSBC have both warned in their latest communication of the potential upset from Brexit on their operations, but Lloyds was all-together cheerier, acknowledging an uncertain outlook for the UK economy in the near term but not taking any additional impairments in expectation of a downturn. One blot was a further £750m set aside in 2018 for further payment protection insurance (PPI) but investors will likely look through this and focus more on the positives with there being much to like overall in the update. Today’s rise of 3% leaves the stock near the head of the blue-chip leader board and close to a 5-month high above 60p.
Lloyds is one of the best performers on the FTSE this morning with the market rallying by over 3% following a pleasing trading update. Source: xStation
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