Further developments on Brexit this week have, if anything caused even more uncertainty as we head into next week’s crucial vote.
Prime minister May looks set to lose the vote, with the market focused on just how big a margin it may be. The next steps could be a no-confidence vote, or May trying to renegotiate with the EU. Potentially a second vote, or a general election, although both unlikely, remain a possibility.
In Europe, the ongoing dispute between Italy and the EU on the Italian budgetary plans continue to weigh on the Euro.
Whilst in the US, although a temporary pause has been agreed with China on the trade dispute, nothing has been resolved and market concerns remain high.
On the exchanges, sterling remains under pressure with the political uncertainty so high ahead of next week’s critical vote.
GBP/USD is holding above the 1.2700 level for now, but a closing break below the August low of 1.2665 could lead to a test of 1.2500.
GBP/EUR is currently holding above the 1.1200 support, and there remains some buying interest below that level, but sentiment remains extremely negative.
|10/12/18||UK Trade Balance||-£27m||-£1100m|
|10/12/18||UK Industrial Prod. YoY||0.0%||-0.1%|
|10/12/18||UK Manufacturing Prod. YoY||0.5%||-0.1%|
|10/12/18||UK Monthly GDM 3M/3M Change||0.4%||0.3%|
|11/12/18||UK Average Weekly Earns. Ex-Bonus 3M/YoY||3.2%||3.2%|
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2580||-23.44%|
UK Benchmark Rates
|3 month||0.90169%||2 year||1.16%|
|6 month||1.02081%||3 year||1.24%|
|12 month||1.15756%||5 year||1.32%|
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