Sterling edged lower after the meeting and latest reports continued to indicate strong resistance to the draft agreement within parliament.

Sterling volatility eased slightly, although political tensions remained extremely high.

Global equities came under sustained pressure as risk appetite deteriorated and technology losses continued. Market conditions did stabilise to some extent on Wednesday.

The dollar was able to secure significant defensive support from weaker risk appetite and global growth reservations, especially with Euro losses on Italian fears.

Sterling volatility eased slightly, although political tensions remained extremely high.

Oil prices slumped with a daily loss of over 6% for WTI to fresh 12-month lows before a slight recovery. Commodity currencies reversed sharply to register significant daily losses.

Cryptocurrencies remained under pressure with bitcoin sliding to fresh 13-month lows.

The UK CBI industrial orders index strengthened to 10 for November from -6 previously and overall confidence increased.

Bank of England MPC members were inevitably cautious in their comments to the Treasury Select Committee. Governor Carney stated that a recovery in investment was likely if a Brexit deal is secured while there would be a sharp slide in the event of a no deal. He expected a further gradual increase in wages growth and reiterated that rates could go up or down depending on the circumstances of a no deal. Officials expected higher medium-term rates, but weaker fourth-quarter growth.

Political tensions remained high, although there was something of a hiatus with both politicians and markets assessing the underlying situation ahead of Sunday’s planned EU special Summit. Although there was relief that there was no immediate no-confidence vote on May, there was still very strong opposition to the Withdrawal Agreement within parliament. Many EU officials including Irish Foreign Minister Coveny stated that the Agreement would not be re-opened.

GBP/EUR edged below the 1.1250 level while GBP/USD dipped below 1.2800 against the firm dollar. Markets were waiting for the outcome of May’s talks with EU Commission President Juncker on Wednesday and GBP/USD attempted to regain 1.2800.

Economic Calendar