Markets were uneasy over a lack of progress in finding any solution to the Brexit impasse.
Risk appetite held firm with optimism over a potential US-China trade deal. Global equities traded close to 6-month highs. Demand for defensive currencies weakened and the Euro managed to regain some ground on Friday as German yields increased.
The dollar was little changed ahead of the jobs data with slight losses as commodity currencies rallied from Thursday’s intra-day lows. Sterling was hampered by a lack of positive Brexit developments but recovered from lows on reports of a potential long Article 50 extension.
Oil was hit by profit-taking and a correction after Brent failed to break $70.0 p/b. Gold dipped sharply to 4-week lows before staging a strong recovery to trade little changed.
Although Wednesday’s House of Commons vote should further reduce the risk of a ‘no-deal Brexit outcome, markets were uneasy over a lack of progress in finding any solution to the Brexit impasse ahead of the emergency EU Summit meeting next week. The government held another round of meetings with the Labour Party it was also reported that a confirmatory referendum was under consideration, but with no breakthrough, while internal party tensions remained extremely high.
Sterling was also hampered by a slightly softer tone in oil prices and GBP/USD weakened to lows around 1.3060 while EUR/GBP corrected towards 1.1650. Source reports indicated that EU Council President Tusk could propose a flexible 12-month Article 50 extension. Although there were concerns that any long extension would prolong economic uncertainty and delay investment, any easing of the immediate crisis phase would potentially be a positive factor.
GBP/USD recovered to just above 1.3100 while EUR/GBP dipped to around 1.1650 with further choppy trading likely.
|07:00||German Industrial Production (M/M)(FEB)||0.60%||-0.80%|
|08:30||GBP Halifax HPI (M/M)(MAR)||0.10%||5.90%|
|13:30||USD Average Hourly Earnings (M/M)(MAR)||0.30%||0.40%|
|13:30||USD Average Hourly Earnings (Y/Y)(MAR)||3.30%||3.40%|
|13:30||USD Non-farm Payrolls(M/M)(MAR)||180K||20K|
|13:30||USD Private Nonfarm Payrolls (MAR)||170K||25K|
|13:30||United States Unemployment Rate(M/M)(MAR)||3.80%||3.80%|
|13:30||CAD Employment Change (M/M)(MAR)||-||55.9K|
|13:30||CAD Full Employment Change(MAR)||-||67.4K|
|13:30||CAD Unemployment Rate (M/M)(MAR)||5.80%||5.80%|
|13:30||USD Labor Force Participation Rate(MAR)||-||63.20%|
|18:00||USD Baker Hughes US Oil Count||-||-|
|19:30||FOMC Member Raphael Bostic speech||-||-|