At 11:20am this morning, the Prime Ministers spokesperson confirmed the parliamentary vote was still going ahead tomorrow. Just thirteen minutes later, leaks from inside the government to the contrary had GBP selling off against all its major peers, currently down 1% against the US Dollar and 0.65% against the Euro for the day. To add a twist, according to complex law, a vote is now needed to delay the parliamentary vote, and some of those that were voting against the parliamentary vote, are apparently against a vote to delay the parliamentary vote…
Theresa May will make a speech at 3:30pm this afternoon in the House of Commons, shortly followed by Andrea Leadsom, finishing with Brexit secretary Stephen Barclay discussing Article 50.
UK industrial production and GDP data came up short of expectations earlier this morning, although the markets direction is continuing to be driven by Brexit headlines.
What seems relevant information one moment is then quickly cast aside the next as developments within government change on what seems a less-than-hourly basis. What politicians say and do are two entirely different things so for the most up to date information, please speak with your dealer.
U.S. non-farm payrolls increased by 155,000 jobs last month, well below economists’ median forecast of 200,000 jobs and the wage increase was softer than expected, even though its annual rise remained near the highest level in almost a decade. Some Federal Reserve policymakers have also struck a cautious tone about the economic outlook, possibly flagging a turning point in its monetary policy.
PPI figures are out tomorrow, CPI on Wednesday plus retail sales and industrial production on Friday.
The Euro has begun the trading week as one of the strongest G10 currencies, with EUR/USD reclaiming the 1.14 handle and trading its best level since November 20th. Euro Zone investor confidence missed forecasts in recent trade and sapped some momentum with investors now looking ahead to Thursday’s ECB meeting where expectations are that the end of the EUR 2.6 trillion stimulus scheme will be announced.
The Yen has faced some mixed impulses to start the week with safe-haven demand evident again as European equity markets declined, but also some selling pressure after Japanese GDP fell short of expectations.
Looking ahead, machinery orders and PPI data are due tomorrow ahead of Tankan data on Thursday and industrial production on Friday.
Safe-haven flows propped up the Swiss Franc last week and we have seen a similar theme this morning as European equity markets declined and USD/CHF fell to a fresh two-month low of 0.9870. Swiss unemployment also ticked lower to 2.4% from 2.5% and may have lent further support to the Franc.
Investors are now looking ahead to the SNB policy decision on Thursday although few surprises are expected.
The Australian Dollar initially weakened overnight on soft Chinese data and rising trade tensions, falling to a four-week low of 0.7174, but rallied thereafter as Friday’s rebound in oil prices continues to provide support. Australian home loans also surprised to the upside.
NAB confidence indicators are out tomorrow ahead of new home sales on Friday.
NEW ZEALAND DOLLAR
The New Zealand Dollar has gained versus the US Dollar this morning having rebounded from the one-week low seen overnight at 0.6840 after some soft Asian data and rising US-China trade tensions.
Budget data and PMI on Friday are the only notable releases of the week.
The Canadian Dollar touched its lowest level versus the US Dollar since June 2017 on Thursday at 1.3445 but rallied into the weekend as oil prices rallied on the OPEC+ agreement. Canadian employment also jumped by a robust 94.1K which aided the rally.
Housing starts and building permits both came in above forecast today, with housing starts beating the 198k consensus at 216k.
The Swedish Krona has begun the trading week on the back foot with EUR/SEK up to a fresh December high at 10.3385 in recent trade.
Wednesday’s CPI data will be key for the Krona this week as it comes ahead of the December policy meeting where the Riksbank have flagged a possible rate increase.
The Norwegian Krone rose sharply this morning after headline and core inflation both surprised to the upside. The Krone has finished Friday on the front foot as oil prices rallied on the OPEC+ agreement but USD/NOK carved out a fresh three-week low this morning at 8.4412.
Investors are now looking ahead to the Norges Bank policy decision on Thursday with the key policy rate widely expected to remain on hold at 0.75%.
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