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Stock markets mixed as GBP edges higher ahead of Brexit vote


  • Mixed price action in stocks with US30 higher but US100 falling

  • DE30: SAP launches German earnings season with a miss

  • Pound back near 3-month highs ahead of Brexit vote

  • Iran could introduce state-backed cryptocurrency

  • Top 3 charts of the week: CHNComp, GBPUSD, Copper

On the whole it’s a bit of a mixed day for stock markets with the US100 dropping below Monday’s low and down by around 1% while the US30 remains in the green. Some positive remarks on trade from US Treasury Secretary Steve Mnuchin contributed to  gains around the opening bell , but he then chequed the mood with some further comments and the trade situation remains a little unknown as the US and China begin further talks.


In Europe there was a good day of gains for the UK100, but the DE30 is pretty much flat after a fairly quiet cash session.  SAP (SAP.DE) reported its earnings report for the fourth quarter of 2018 today as the first DAX member to do so. The company managed to generate revenue of €7.434 billion, 2.84% higher than median estimate. On the other hand, EPS came in at €1.51, 2.71% below expectations. The company disappoint especially in terms of new cloud bookings. While bookings grew by 23%, still it was a slowdown against the previous period. Let us recall that the company spend as much as $10 billion on acquisitions last year and is gearing up for a major restructuring. The restructuring process should begin this year.


Just two weeks on from the heaviest ever parliamentary defeat for government, shortly after 7PM this evening Prime Minister Theresa May will once more ask the House of Commons to vote on her withdrawal agreement. This “plan B” looks an awful lot like the “plan A” which was so comprehensively rejected last time out by a margin of 230 votes, and at the risk of stating the obvious it is highly unlikely to gain the required support this time around. The GBP/USD rate has rallied fairly strongly in the past couple of weeks since PM May’s deal was rejected. The market is now close to its highest level since October and not far from the $1.32 handle. While there is much that can go wrong for the pound, the price action remains constructive and as long as the market remains above $1.30 then the path of least resistance appears to remain to be higher.


The cryptocurrency market has not shown too many moves of note so far today. Anyway, the Bitcoin price is falling roughly 1% at the time of writing extending its moderate declines seen on Monday. After the United States imposed punitive sanctions against Iran, Iran-based companies are struggling to run their business activities on a regular basis and the ability of financial institutions to conduct transactions with the world has been shackled since then. However, the country could ease their companies by issuing its state-backed cryptocurrency. This step would help abate some of the effects of the sanctions. Moreover, the Iranian government informed that it expected to make an announcement concerning the digital asset at the annual Electronic Banking and Payment Systems Conference. The event kicks off in Tehran on January 29.


Our top 3 charts of the week focus on the CHNComp, GBPUSD and Copper and can be viewed here.


Daily summary: Dollar continues to strengthen, EURUSD and GBPUSD 1% on the downside
Stock of the week - Bed Bath & Beyond (18.08.2022)
Massive drop in US gas inventories!
DE30: Setback in the short-term upward trend
BREAKING: US jobless claims unexpectedly fall back to 250k