Global Themes

No news… Will it be good news

  • USD off the highs as fatigue sets in
  • RBS to cut costs by £2 bio after ninth straight loss - Bloomberg


The USD gave up ground against all the major currencies yesterday as a relatively quiet session saw profit taking from USD long position holders. Equity markets managed to make small gains but there are signs of momentum starting to fade there too. 

GBP climbed vs USD up to the mid 1.25s, an all familiar level over the last few weeks. EUR also rallied back up to the important 1.0600 area. With no significant data today and a continued absence of policy from the new US administration it’s most likely moves will come from an ongoing closure of “stale” positions. This is most likely to be USD negative, although downside should be moderate.  While equity markets still managed to post yet another intra day high and close, the gains are becoming quite minimal. The long position in global equities is probably the largest and most technically overbought market in the world with a lot of fiscal stimulus, yet to be confirmed, already priced in. 


RBS to cut costs by £2 bio after ninth straight loss - Bloomberg
Following an agreement to settle with a U.S. investigation into sales of mortgage backed securities it was a foregone conclusion that RBS would post a loss having set aside £3.8 bio.

The net loss was almost 7 billion pounds, sharply higher from 2 billion pounds last year although there were some hefty fines and restructuring charges. The operating profit actually came in at 3.67 billion pounds, higher than the 3.1 billion that had been forecast. The bank recently scrapped plans to sell its Williams & Glyn subsidiary. RBS are looking to cut costs by 2 billion pounds over the next four years.  

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