Political concerns continued to push Sterling weaker with no evidence of a breakthrough in Brexit talks.
US data was mixed with a soft retail sales release helping to push 10-year yields to 2019 lows which undermined the dollar, although there was still net support from a lack of confidence in alternatives.
The Euro recovered ground on Wednesday after reports that President Trump would delay any decision on imposing any tariffs on EU exports for up to 6 months.
Risk appetite also improved following the EU auto report with gains for major equity indices, although underlying caution still prevailed.
Political concerns continued to push Sterling weaker with no evidence of a breakthrough in Brexit talks and strong pressure on Prime Minister May to resign.
Oil prices made net gains with underlying support from the increase in Middle East tensions. Bitcoin corrected from fresh 9-month highs, but with strong support on dips.
There were no significant UK data releases during the day with markets focussing on international market trends and domestic politics. There was a lack of confidence that Prime Minister May would be able to win parliamentary backing for the Brexit Withdrawal Bill in early June and expectations that her position was continuing to weaken amid increased pressure for a resignation timetable and expectations of a no-confidence vote in June. With global equity markets on the defensive, GBP/USD declined to 3-month lows below 1.2850 while GBP/EUR posted 8-week lows below 1.1500.
The UK currency stabilised later in the session, although there was only a limited recovery even with a net improvement in global risk conditions. May faces an important meeting with the 1922 backbench committee on Thursday and markets remained pessimistic over the potential for a Brexit breakthrough which continued to sap support with GBP/USD below 1.2850.
|09:00||Consumer Price Prelim YY(APR)||1.00%||1.10%|
|09:00||Consumer Price Prelim MM(APR)||0.30%||0.20%|
|09:00||CPI (EU Norm) Prelim YY(APR)||1.10%||1.20%|
|09:00||CPI (EU Norm) Prelim MM(APR)||-||0.60%|
|10:00||Euro-Zone Trade Balance(MAR)||-||17.9B|
|13:30||USD Building Permits(APR)||1.298K||1.288K|
|13:30||USD Building Permits (M/M)(APR)||-||-0.20%|
|13:30||USD Housing Starts(APR)||1.215M||1.139M|
|13:30||USD Housing Starts (M/M)(APR)||-||-0.30%|
|13:30||USD Philadelphia Fed. Manufacturing Index(MAY)||10||8.5|
|13:30||CAD Foreign Securities Purchase(MAR)||-||12.05B|
|13:30||CAD Manufacturing Shipments (M/M)(MAR)||-||-0.20%|
|23:30||NZD Business NZ PMI(APR)||-||51.9|
|23:45||NZD PPI Input (Q/Q)||-||1.6|