What you need to know

  • Pound under pressure amid Brexit and Scottish secession worries
  • Sterling drops below $1.22 and euro edges up towards 88p
  • European equities mixed, energy stocks steadier as oil little changed.
  • S&P 500 futures flat, Treasury yields higher ahead of Fed
  • Gold only one dollar above the $1,200 mark

The UK pound is back under pressure as traders become concerned that Edinburgh’s demand for a another referendum on Scotland leaving the UK adds to the uncertainty over Britain’s divorce from the EU.

Sterling accelerated losses in early European trading once it breached the $1.22 level, and is down 0.7 per cent to $1.2133 to once again flirt with seven-week lows.

It now takes 87.62 pence to buy one euro, up 0.5 per cent on the day.

However, the weakening pound is helping support London’s blue-chip equity index. The FTSE 100, replete with foreign currency earners that are seen benefiting from softer sterling, is up 0.1 per cent.

The tone across stock markets is generally cautious as traders are wary of making bold bets ahead of a plethora of events this week: including the Dutch general election, and monetary policy decisions from the central banks of the US, UK and Japan.

US index futures suggest the S&P 500 will start the day unchanged at 2,373.5, less than 1 per cent shy of its record closing high touched at the start of the month.
The pan-European Stoxx 600 index is down 0.1 per cent as miners see losses.

However, resources stocks supported the Australian market, where the S&P/ASX 200 was flat as financials struggled.
Greater China shares exemplified the mildly mixed mood, with Hong Kong’s Hang Seng index down 0.1 per cent and the Shanghai Composite up less than 0.1 per cent.

Japan’s Topix dipped 0.2 per cent as shares in Toshiba
rose 5.6 per cent in Tokyo after the company confirmed it had been granted a one-month extension to the March 14 deadline for filing third-quarter results, after also delaying a month ago.

Copyright The Financial Times Limited 2022. All rights reserved.
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