GBP: Sterling (GBP, pound) finished November in an erratic fashion, moving lower during the morning session but pushing back to highs by the close of the European markets. The main catalyst for the frosty reception was the Bank of England (BoE) bank stress results and the Financial Stability Report. It was revealed that Royal Bank of Scotland (RBS) is the worst prepared of the UK’s biggest lenders to cope with another financial crisis – should it happen. The BoE found Barclays and Standard Chartered also missed key hurdles, but had implemented measures to address them. The results forced RBS to devise plans to bolster its balance sheet by £2 billion through cost cutting and shedding assets. By the afternoon, however, the market had shrugged off the bearish comments, as focus was redirected back onto the incoming Trump administration and Italy’s upcoming referendum.
As we open the door to the first window on the advent calendar, much of the festive focus will be on the manufacturing sector, with the release of Manufacturing Purchasing Managers Index (PMI) data. Given the post-Brexit slide experienced by sterling, we expect this to remain elevated.