Prime Minister May stated that the Withdrawal Deal would be brought back for another vote in early June.

Risk appetite staged a tentative recovery despite trade concerns and weaker than expected Chinese data releases as a slight softening of US trade rhetoric supported sentiment.

Global equity markets posted net gains, although with underlying caution still in evidence.

Defensive demand for the yen and Swiss franc eased slightly and gold edged lower.

The dollar was mixed amid a lack support for other majors as the Euro was undermined by fresh concerns over the Italian political situation.

Oil prices retreated after a very high API inventory build damaged sentiment. Higher than expected inflation data helped trigger a Swedish krona correction.

Cryptocurrency sentiment remained strong, although bitcoin corrected from 8-month highs.

UK labour-market data was mixed with unemployment declining to 3.8% from 3.9% and the lowest reading since 1974, although the employment increase was below consensus forecasts at 99,000. Headline average earnings growth slowed to 3.2% from 3.5% previously while the underlying rate slowed to 3.3% from 3.4%. The slowdown in wage inflation had a limited negative impact on Sterling with further doubts over a Bank of England rate hike this year.

Significantly, the UK currency was unable to gain significant support when global risk appetite recovered which suggested an underlying lack of buying support.

The opposition Labour Party stated that they were still concerned that a future Conservative Party leader would break any deal made to break the immediate Brexit impasse and Labour leader Corbyn called for further concessions. There was further speculation that the talks could collapse soon. Prime Minister May also stated that the Withdrawal Deal would be brought back for another vote in early June. GBP/USD dipped to lows near 1.2900 while GBP/EUR corrected towards 1.1515 with Sterling little changed on Wednesday.

Economic Calendar