Political fears undermined Sterling as the government again failed to secure parliamentary support for the Withdrawal Agreement and deadlock continued.

Risk appetite stabilised on Friday and secured a more substantial boost on Monday after two stronger than expected Chinese PMI data releases.

Global bond yields recovered with the US 3-month/10-year curve no longer inverted. Month-end trading tended to underpin equities with gains sustained by firmer global risk conditions on Monday.

The dollar was mixed with slight net trade-weighted losses on Monday despite a lack of underlying Euro support.

Political fears undermined Sterling as the government again failed to secure parliamentary support for the Withdrawal Agreement and deadlock continued.

UK fourth-quarter GDP growth was confirmed at 0.2% with a slight upward revision to 1.4% for year-on-year growth from 1.3% while business investment declined slightly less than expected. Sterling moved sharply higher ahead of the New York open amid reports that the Withdrawal Agreement could be approved as key Conservative MPs moved to back the deal.

Gains faded as expectations of approval faded again and, in the event, there was a defeat by 59 votes. Sterling moved lower following the result with a GBP/USD dip below 1.3000 from earlier highs above 1.3120 before a slight recovery as GBP/EUR held above 1.1600.

CFTC data recorded a further net decline in short, speculative Sterling positions, illustrating that the UK currency will need net buying rather than just short covering to secure gains. Weekend Brexit speculation continued, but with no sign of cohesion and EU pressures were illustrated by Commission President Juncker’s warning that patience was running out.

Another round of parliamentary indicative votes will be held on Monday while firmer risk appetite pushed GBP/USD to around 1.3050.

Economic Calendar

ExpectedPrevious
07:30CHF SVME PMI(MAR)-55.4
07:45Markit/ADACI Mfg PMI(MAR)-47.7
07:50Markit Mfg PMI(MAR)--
07:55EUR German Manufacturing PMI (M/M)(MAR)--
08:00Euro-Zone PMI Manufacturing(MAR)49.249.2
08:30GBP PMI Manufacturing(MAR)5252
09:00Euro-Zone CPI (Y/Y)(MAR)1.50%1.50%
09:00Unemployment Rate(FEB)-10.50%
09:00Euro-Zone Core CPI (Y/Y)1.00%1.00%
12:30USD Core Retail Sales (M/M)(FEB)0.30%0.90%
12:30USD Advance Retail Sales (M/M)(FEB)0.30%0.20%
13:30CAD RBC Manufacturing PMI(MAR)-52.6
13:45USD Manufacturing PMI(MAR--
14:00USD Business Inventories(JAN-0.60%
14:00USD Construction Spending (M/M)(FEB)-1.30%
14:00US Manufacturing ISM(M/M)(MAR)-54.2
21:00NZIER Business Confidence (Q/Q)--17

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.