5th December 2017 Market Update
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?? GBP – Brexit news dictated Sterling’s moves with a positive move higher in the morning when a deal looked likely and then those moves we retracted following the DUP’s refusal. Construction PMI was positive yesterday but overlooked.
Services PMI is expected to drop marginally today. Brexit news will take centre stage as Theresa May will likely begin negotiating with the DUP and make wording amendments to resolve yesterday’s issues.
?? EUR – Only news of note from Europe yesterday was inflation data which was slightly lower than expected. Again, much focus was on the Brexit talks.
There is a bit more today than yesterday, final services PMI are expected to remain the same while retail sales are expected to drop substantially. This could weigh on the euro throughout today.
?? USD – Nothing of interest from the US yesterday but GBP/USD did suffer following the announcement that no EU deal had been reached. Pretty quiet week until jobs day on Friday.
Services PMI is out later today but will likely have little effect.
09:00am: Final Services PMI
09:30am: Services PMI
14:45pm: Final Services PMI
15:00pm: Non-Manufacturing PMI
Summary: Brexit negotiations were in focus again yesterday. Early indications suggested that a deal was to be signed imminently. Even with the tricky situation of the Irish border, reports suggested a deal had been reached with language that suited the Irish government and allowed the EU to agree that “sufficient progress” had been made and phase 2 of negotiations could commence. Then after a reported leak the DUP blocked the deal by stating that they would not accept any arrangements that would mean Northern Ireland is treated differently to the rest of the UK.
Focus will still be on Brexit until the December 14th deadline but aside from that non-farm payrolls from the US could be significant as to their next interest rate decision.
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