Rare is the day when Donald Trump doesn’t do, say or Tweet something that reverberates around the world. So it was hardly surprising that on Friday, the former reality television star said that he would force a government shutdown that lasts for a ‘very long time’ if he doesn’t get the money for a border wall. The President had demanded $5.7 billion to build a wall that would likely be ineffective at preventing people crossing the US border. Trump, who has repeatedly said he would be the one to shut the government down – and that he would not blame the Democrats if a shutdown happened – sent a Tweet blaming the Democrats.
On Friday afternoon, the Federal Reserve Bank of New York President, John Williams, said that the central bank could well reassess its interest rate policy in the New Year if the US economy slows. Speaking to CNBC, Williams said “We are listening, there are risks to that outlook that maybe the economy will slow further.” That could be an attempt to encourage the markets not to panic. Stock markets went into freefall after the Fed said it will hike rates two more times in 2019, but these comments reiterate that this policy is not set in stone. The markets reacted positively, with the Dow Jones spiking.
The economic data releases from Friday are all documented below, so do have a read of them to get a sense of what happened in the UK, eurozone and the US on Friday. Today is extremely quiet for obvious reasons, as people prepare for the Christmas break. Things to look for next year centre on Theresa May’s Brexit plans and whether they can get through Parliament. There is every reason to think they have no chance, especially given that there has been virtually no changes to the bill that was postponed because it would be heavily defeated.
So much hinges on the government’s next steps and it is certainly a risk to present MPs with a choice of voting for her bill or accepting a no-deal Brexit. There is still a chance that the Commons could vote against a no-deal, in which case it will be fascinating to see what happens after that. Anything is possible at the moment and sterling’s performance over the next few weeks is virtually entirely dependent on the outcome.
We sincerely hope you all have a wonderful Christmas with friends and loved ones. Eat, drink, be merry and when you return, do have a serious think about making sure any future purchases are protected. We can use a forward contract to lock in today’s exchange rate for up to twelve months. Find out more by calling your Personal Trader on 020 7898 0541.