David Cameron Announces MPs Will Be Free to Campaign for ‘Brexit’
Once David Cameron has finished his negotiations with the EU regarding changes to Britain’s membership, he will lift the ‘collective responsibility’ which prevents Tory MPs from campaigning against the government’s official position. The move has been branded as ‘crazy’ by some and could divide the Conservative party. The Prime Minister has also revealed that he won’t step down from his role if he loses the referendum, stating that ‘come what may, I will continue to lead the government in the way I have.’
Earlier…
Next Christmas Sales Figures Set Bad Precedent for European Retail Sector
The first major European retailer to announce its UK sales figures for the Christmas period, Next, has disappointed the markets by announcing growth in sales of just 0.4% in 2015 Q4. Sales in high street stores fell -0.5% and as a result shares in the company fell -5%. The retailer has revised its profit forecast for the year down to £817 million, towards the bottom end of a forecast made in October which anticipated profits between £810 million to £845 million.
Falling sales figures could be more down to failures on Next’s behalf rather than outside factors, however, as John Lewis has released record sales figures for the Christmas period. Department store sales grew 6.9% year-on-year (YoY) to £951.3 million, with clearance sales after Christmas up 23%.
Earlier…
Pound Sterling (GBP) is making bullish gains on the Swiss Franc (CHF) today thanks partly to a market correction after traders flocked to the ‘Swissie’ yesterday in the wake of a major Chinese stock sell-off. A better-than-expected performance from the UK construction sector has also helped to push Pound Sterling higher.
Positive Construction PMI Bolsters GBP/CHF Exchange Rate after Manufacturing Woes
The UK construction sector has performed better-than-expected, with the Markit/CIPS PMI rising from 55.3 past the forecast 56 mark to hit 57.8. The growth was led by the commercial construction sector, although housing construction also saw a strong rate of growth after hitting a 29-month low during November.
The data showed that the sector is experiencing a robust volume of new business, with new orders rising at the second fastest rate since July. Companies reported an increased willingness among clients to commit to new projects, which in turn meant that sector employment was able to rise away from the 26-month low that was seen in November.
Tim Moore, Senior Economist at Markit, explains: ‘UK construction companies finished 2015 in a positive fashion, as overall output growth recovered from November’s seven-month low. Commercial building was the main engine of growth, with this area of activity expanding at the strongest pace since autumn 2014. There was also a rebound in house building activity in December, but momentum was still much softer than the post-crisis highs achieved during 2014.’
The news will come as a relief to investors following yesterday’s surprising slowdown in the manufacturing sector, with the PMI dropping to 51.9 from 52.5.
The GBP/CHF exchange rate is currently trending in the region of 1.4826.
CHF/GBP Exchange Rate Slides: Investors Desert Safe Haven as Fears over Chinese Economy Abate
The Swiss Franc is currently sliding -0.5% against Pound Sterling, the US Dollar (USD) and the Australian Dollar (AUD) following a surge in demand yesterday triggered by an abrupt sell-off in Chinese stocks. Another contraction in China’s manufacturing sector reignited fears over the country’s economic health and as a result Shanghai shares in domestic companies dropped nearly 7%. Investors turned their attention to safe-haven assets, mainly the Franc and the Japanese Yen (JPY), which caused the ‘Swissie’ to shoot up in value.
The Swiss Franc has spent today on the decline as the market corrects and fears over the Chinese economy abate. It has managed to remain within opening levels against the Euro following the poor inflation data released earlier during the European session.
The CHF/GBP exchange rate is currently trading between 0.6737 and 0.6784.
Pound Sterling to Swiss Franc (GBP/CHF) Exchange Rate Forecast: UK Composite PMI on Tap
With the slowdown in manufacturing putting pressure on other parts of the economy to better expectations, traders will likely pay close attention to tomorrow’s Markit Services and Composite PMI. The composite, which aggregates the indexes for individual sectors, will show whether the drop in manufacturing activity has dented the UK’s economic output. There is no important Swiss data due until Friday, when unemployment figures will be released.
The Pound Sterling to Swiss Franc (GBP/CHF) exchange rate is currently trending between 1.4658 and 1.4725.
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