The UK parliamentary Brexit debate continued Thursday with a focus on the economy.
Global equity markets declined sharply on Thursday before finding respite with demand for defensive assets also fading to some extent as the yen surrendered gains.
US bond yields declined further with a dip in Fed Fund rate expectations undermining the dollar amid expectations of a pause following a December hike.
Oil prices weakened as OPEC failed to finalise a deal and looked to target a smaller than expected output cut with commodity currencies also generally vulnerable.
European currencies were still unsettled by political concerns.
Cryptocurrencies registered sharp losses with bitcoin sliding to 15-month lows.
The UK parliamentary Brexit debate continued Thursday with a focus on the economy. There was further speculation that the December 11th vote could be postponed, and uncertainty remained extremely high amid reports that the government could also introduce further amendments to win over sceptical Conservative MPs. Sterling gained an element of protection from expectations that a ‘no-deal’ outcome would be avoided and that the UK could end up staying in the EU.
The UK currency was, however, hampered by the slide in risk appetite while gilt yields continued to decline, and energy prices also retreated which hampered Sterling.
Overall, there were gains against the dollar as the US currency lost ground while GBP/EUR retreated to test 1.1180 in relatively narrow ranges. Sterling was unable to sustain the gains and there will be the potential for choppy trading during Friday with position adjustment an important feature as rumours continue. Markets will be wary of substantive political developments over the weekend as GBP/USD settled around 1.2765.
|10:00 EUR||Euro-Zone GDP (Y/Y)||1.70%||1.70%|
|13:30 USD||Non-farm Payrolls (M/M)||205K||250K|
|13:30 CAD||Canadian Unemployment Rate (M/M)||5.90%||5.80%|
|15:00 USD||Michigan Consumer Sentiment||97||97.5|