Sterling enjoys Brexit clarity

The pound is rallying once more this morning, forcing the FTSE to give up some of its gains, says Joshua Mahony, market analyst at IG.

Sterling enjoys Brexit clarity

The pound is continuing to charge higher this morning, proving a continued hindrance to the FTSE.

Despite yesterday’s court decision, markets continue to enjoy a degree of clarity over the UK’s path that has not been seen since June’s referendum result. With Citibank and Credit Suisse the latest banks to voice their plans to move jobs out of London, it is clear that Theresa May needs to have a robust and dramatic jobs strategy if we are going to see the UK maintain growth over the coming years.

Day three and Donald Trump’s focus has turned south, with the new President expected to lay out plans for his fabled wall on the US-Mexican border. With all the focus on fiscal stimulus, the decision to build a $14bn wall would certainly prove a positive first step for the US construction industry. Whether Congress are willing to reallocate $14bn to the building of a wall is another matter.

One thing is for sure, if Trump manages to build a wall that benefits US jobs and security, yet is paid for by Mexico, it would be an incredible sign of intent from the new President.

Fresnillo and BHP Billiton saw selling at the open today, despite both unveiling largely positive production figures in the back end of 2016. BHP Billiton hit record high iron ore production levels in the second half of 2016, while Fresnillo’s gold and silver production also touched a record high, so today’s weakness could be a sign that the recent commodity stock rally could be coming under pressure.

Ahead of the open we expect the Dow Jones to open 52 points higher, at 19,964.

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