Political stresses continued to undermine Sterling with fresh concerns surrounding the risk of a general election.
Rhetoric from Fed Chair Powell and, especially, Vice-Chair Clarida was generally dovish, curbing underlying dollar support, although correction pressures limited scope for further EUR/USD support.
Risk appetite held firm with global equities making headway on underlying hopes that US-China trade talks would make progress.
Demand for the yen and Swiss currency faded as wider fears declined for now while commodity currencies made significant net gains.
Oil prices recovered from early losses to trade higher as global demand concerns eased slightly.
Cryptocurrencies dipped lower amid once again amid a lack of liquidity.
Political stresses continued to undermine Sterling with fresh concerns surrounding the risk of a general election having a negative impact on sentiment. Debate on the Brexit Withdrawal Agreement continued in parliament and there were a couple of MPs reportedly switching to backing the deal, although there were still very strong expectations that the government would be defeated in next week’s meaningful vote.
Japanese Prime Minister Abe stated that the world does not want to see a ‘no-deal’ Brexit and there were expectations that parliamentary manoeuvring would continue to find a resolution. There was also a decline in implied volatilities which suggested that underlying market concerns had eased to some extent.
Oil prices recovered ground and risk conditions were broadly stable which limited the potential for Sterling selling. GBP/EUR pushed to 2019 lows below 1.1000 before bouncing to 1.1180 while GBP/USD consolidated near 1.2750.
|09:30||GBP Industrial Production (Y/Y)(NOV, 2018)||-0.70%||-0.80%|
|09:30||GBP Industrial Production (M/M)(NOV, 2018)||0.30%||-0.60%|
|09:30||GBP Manufacturing Production (Y/Y)(NOV, 2018)||-0.70%||-1.00%|
|09:30||GBP Manufacturing Production (M/M)(NOV, 2018)||0.40%||-0.90%|
|09:30||GBP Trade Balance(NOV, 2018)||-11.40B||-11.87B|
|09:30||GBP Trade Balance Non EU(NOV, 2018)||-3.70B||-4.25B|
|09:30||United Kingdom GDP (M/M)||0.1||0.1|
|13:30||USD CPI Ex Food & Energy (Y/Y)(DEC, 2018)||2.20%||2.20%|
|13:30||USD CPI Ex Food & Energy (M/M)(DEC, 2018)||0.20%||0.20%|
|13:30||USD CPI (Y/Y)(DEC, 2018)||1.90%||2.20%|
|13:30||USD CPI (M/M)(DEC, 2018)||-0.10%||0.00%|
|14:00||GBP NIESR GDP Estimate||0.30%|
|18:00||USD Baker Hughes US Oil Count||877|