Insights

1 Minute Market Rundown – 17th October 2022

UK Chancellor Number 4 in 4 Months
Early Signs are we Have an Adult in the Room
Risk Market Mixed

They say 24 hours is a long time in politics and so it is proving in the UK at the right now. Policy announcements are meaningless at the moment as the farce at the top of the government continues. Chancellor roulette continues as we have our 4th person at the helm of the treasury in 4 months and surely a calendar must be in the making! Jeremy Hunt is nobody’s favourite politician but so far is acting like a grown up which is a relief to the markets in the short term. So far he has unwound almost every policy announced 2 weeks ago and Liz Truss’s position as prime minister looks untenable.

For now the markets are taking the positives out of recent developments with the Gilt market yields down 6% at the time of writing and GBP up a cent from its close on Friday. I will mince no words here, it will not last in my mind. Once the dust has settled we are fast becoming an untrustworthy and unstable place to invest. Long term this is negative for the economy and the currency. Let the good news reaction play out and sell GBP rallies.

Elsewhere the markets are mixed. Crypto has held onto half the recent bounce whereas the stock market unwound all of Thursday’s rally on Friday. The calendar is pretty light this week so triggers for momentum may be hard to find. In this environment I have a slight bias to buying dips as the short risk positions outweigh. Earnings season continues with Netflix and Tesla the most noticeable on my radar.

As always, good luck out there!

Richard Usher – Head of OTC Trading

Richard-Usher-1

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