Fetching $2.0108 merely a week ago, the pound currently trades firmly below the 26-year highs breached earlier this week at $2.0331. Financial market participants contend that the sterling?s pullback from prior highs is indicative of profit taking and not the broad correction that news wires claim.
[B][U]UK Headlines:[/U][/B]
[B][I]ABN Amro can sell LaSalle, court rules[/I][/B]
ABN Amro was on Friday given permission to sell its US subsidiary to Bank of America without shareholder approval, ending a 10-week legal tussle over the sale and setting the stage for a head-on bidding war for control of the Dutch bank
http://www.ft.com/cms/s/dc3e38ce-311f-11dc-891f-0000779fd2ac.html
[I]-Source: Financial Times[/I]
[B][I]Brown denies shift away from U.S.[/I][/B]
Prime Minister Gordon Brown denied on Friday a shift in foreign policy away from the United States after one of his ministers told an audience there that a country’s strength depended on alliances not military might.
http://uk.reuters.com/article/domesticNews/idUKL1372877820070713
[I]-Source: Reuters UK[/I]
[B][I]London Luxury Home Prices Rise Record 3.1% in June[/I][/B]
Luxury home prices in London rose at the fastest monthly rate since real estate broker Knight Frank LLC began tracking them 31 years ago, suggesting the most expensive properties remain resilient to rising interest rates.
http://www.bloomberg.com/apps/news?pid=20601102&sid=a6jlfernxFT4&refer=uk
[I]-Source: Bloomberg[/I]
[B][U]UK Market Activity:[/U][/B]
[I][U]Currency Markets:[/U][/I] [B]GBP[/B]
Fetching $2.0108 merely a week ago, the pound currently trades firmly below the 26-year highs breached earlier this week at $2.0331. Financial market participants contend that the sterling?s pullback from prior highs is indicative of profit taking and not the broad correction that news wires claim. Burnishing cable?s broad appeal has been an amalgamation of hawkish BoE sentiment and expanding yield spreads which in-turn have stoked carry-trade inflows. In conjunction with strong U.K. fundamentals, an ultra-weak dollar story continues to bolster the pound?s potential to test yet another psychological level. With no economic data on the docket today traders will center their strategy around the unexpected two-year low in US retail sales and a scheduled speech from BoE MPC member Charles Bean.
[I][U]Equity Markets:[/U][/I] [B]FTSE 100
[/B]London blue-chips ripped higher scaling previous peaks to make a fresh 7-year high of 6716.70. Elevating 0.28 percent and 1.3 percent last session, the FTSE 100 Index tracked gains realized in the DJIA which reached a record plateau on yesterday posting its biggest gain since 2002. Banking index weights were session winners contributing the most to the near decade top. Shares in Barclays (BARC.L) and Royal Bank of Scotland (RBS.L) climbed to 724.50p (+0.84%) and 640.00p (+0.87%) respectively with M&A related news buoying the financial sector.
[I][U]Fixed-Income Markets:[/U][/I] [B]10-Year Long Gilt
[/B]Amidst rallying global equities and scant economic data, ten-year gilt yields followed treasuries easing 1bp to 5.440 percent. Price action was choppy in the debt markets as traders digested mixed readings on US consumer activity. Looking ahead to next week, financial markets will see a welter of British data as traders place positions ahead of consumer price data and Bank of England minutes.
