May faces next stage in Brexit

The economic calendar is fairly light today with USD data making up the majority of significant date due for release. US Home price index due out at 14:00 is largely expected to be down from the previous release, with markets already being 80% priced in for a drop.

Previous Day's Market Highlights

After months of wrangling between Theresa May and Brussels, talks finally came to an end on Sunday after all 27 EU leaders approved the Prime Minister's contentious withdrawal agreement. The resulting news saw a sharp gain against both the dollar and euro as investors saw an end to the uncertainty surrounding the UK’s future. However, with May still facing the final hurdle of passing the bill through parliament, we could still be in for further turmoil.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1295 1.1506 1.1172 2.90%
GBP/USD 1.2842 1.3175 1.2691 3.67%
EUR/USD 1.1373 1.1500 1.1302 1.72%
GBP/AUD 1.7675 1.8459 1.7502 5.18%
GBP/NZD 1.8879 1.9903 1.8657 6.26%
GBP/CAD 1.6938 1.7285 1.6637 3.75%

Today's Market Highlights

After a brief period of contemplation over Thanksgiving last week, in the thin markets of trading on Friday, the dollar bulls seemed to be ready to take the reins once more. Plummeting oil prices, equity markets under pressure, uncertainty over US/China trade relations and political risk in Europe, all add up to increased fear in global financial markets. The dollar will perform well in these times. And so we see that despite Treasury yields remaining subdued, net CFTC dollar futures continue to move dollar positive. The sustainability of this dollar strength remains a medium term question (and likely to be a Q1 or even Q2 2019 story). This dollar strength is pulling through the G4 major currency pairs, whilst preventing a continued gold rally. This morning there has been a slight improvement in risk appetite, helped by a 1% to 2% rebound on oil. Sunday’s snap EU Council Summit which signed off on the draft Withdrawal Agreement between the EU and UK, is allowing a degree of positivity through European markets. However, if this is the case, then it may be short-lived as it is within the UK Parliament where the deal is made or broken. Upside traction has been hard to come by in recent weeks as early session rallies have been sold into. This will be a key test for the bulls early this week.

Today's Economic Calendar

Time Currency Release Consensus Previous
11:00 GBP CBI Distributive Trades Survey 5
14:00 USD Home Price Index 0
14:00 USD Conference Board Consumers 135.5 137.9