ALPHA Market Update 31 January 2019


Market Update





  • Oil prices rose for a third day on Thursday, pushed up by signs of lower imports into the United States as part of efforts by OPEC to tighten the market. U.S. West Texas Intermediate (WTI) crude futures were at $54.58 per barrel at 0249 GMT, up 35 cents, or 0.7 percent, from their last settlement. WTI closed up 1.7 percent on Wednesday when prices touched their highest since Nov. 21 at $54.93 a barrel. International Brent crude oil futures were up 52 cents, or 0.8 percent, at $62.17 per barrel.

United Kingdom

  • With no notable updates on the Brexit situation, the ball remains in the EU’s court as far as negotiations are concerned. The EU has reinforced the view that they will not budge on the Irish backstop (Brady amendment), however, they have said they can adjust the leaving date if it is to accommodate real progress for an updated deal, this works in conjunction with the Spellman amendment in which parliament voted against leaving without a deal. While not binding, this amendment should give confidence to the EU that even the hard brexiteers should support am an amended deal, as parliament is likely to move for a second referendum rather than officially allow a no deal Brexit.


  • The German labour agency does not expect Britain’s expected departure from the European Union to have any lasting impact on the job market in Europe’s largest economy, its chairman said on Thursday. “Clearly branches like the aviation industry, transport and logistics are affected,” Detlef Scheele said. But he added: “We don’t expect Brexit to have any long-term effect on the German labour market.”
  • Economic confidence dropped to 106.2 for January, a level not since the end of 2016, from 107.4 recorded for December, as the Eurozone struggles against political uncertainty from Brexit and the repercussions of a trade war between China and the United States. Gloom across the European Commission’s economic sentiment index spread worst in industry, services, consumers and business climate, while the mood improved for retail trade and construction. France, the second-biggest economy in the euro area, saw consumer confidence levels rebound in January from a slump in the previous month, though they remained well below average. While in Italy, manufacturing confidence index slipped in January to its lowest reading since September 2016.

Australia & New Zealand

  • The Australian Dollar rose broadly Wednesday after inflation surprising on the upside for the final quarter, although gains could prove short-lived because the jury is still out on whether a Reserve Bank of Australia (RBA) interest rate cut is in the cards for the months ahead.
  • Inflation rose by 0.5% during the final quarter of 2018, up from 0.4% previously and ahead of the economist consensus for an unchanged reading of 0.4%.
  • Despite the quarterly surprise, the annualised rate of inflation declined from 1.9% to 1.8% during the final months of the year, although this was above the consensus for a reading of 1.7%.
  • “The largest contributions came from the 9.4% increase in tobacco prices and a 6.2% lift in domestic airfares. Offsetting this slightly was a 2.5% fall in petrol prices,” says Jack Chambers, an economist at Australia & New Zealand Banking Group (ANZ).
  • Trimmed mean inflation came in at 0.4% for the period, unchanged from in the prior quarter, although differences in how this measure is calculated to mean the annualised rate remained steady at 1.8%.
  • Trimmed mean inflation strips out the most volatile 30% of items from the goods basket, which are often food and energy items, so is thought to provide a better reflection of domestically generated inflation pressure.
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