Brexit negotiations continue ahead of crucial vote

January 8, 2019

A fairly quiet day ahead as far as data releases go, but events away from economic data could make markets move.

The USD weakened overnight, allowing paired currencies to rise yesterday. The EUR/USD opened the week at a low of $1.13938 and then climbed for the vast majority of the session. The pair peaked at $1.14820 late in the day and is currently trading at $1.14734. The pound followed a similar path to the euro, however the movements were less pronounced. The GBP/USD opened the week at $1.27138 and dipped to an opening-hour low of $1.27107. The pound climbed for most of the session after hitting that low, peaking at $1.27866. It is not far off that high, where it is now trading at $1.27836.

Indices took a bit of a breather on Monday after the huge rally on Friday. The Dow opened at 23,477.18 and remained reasonable flat during early and mid-session trading. Late-session trading saw the Dow drop to a low of 23,299.11 before it rallied to a high of 23,691.36. It has come off those highs and is currently trading at 23,557.90. The Dax gave up some of the gains it made on Friday, possibly due to uncertainty over Brexit. The German index opened the day at 10,828.97 and bumped up to a high of 10,846.20. Things quickly went south from there, with the Dax falling over 100 points in a two-hour period after hitting the high. The losses continued, albeit at a much slower pace, with the index hitting a low of 10,679.60 late in the day. It bounced off those lows and closed at 10,753.70.

The day ahead appears to be a quiet one for markets, but there is plenty of things happening around the world that could cause some volatility. Brexit negotiations come back into focus, with a parliamentary vote on Theresa May’s deal slated to occur early next week. This gives the UK PM only a few more days to seal a deal that will be palatable to a majority of her parliamentary colleagues. The US government shutdown and US-China trade talks could also impact markets.

Data published today includes:

UK – Halifax HPI

Canada – Trade Balance

Japan – Consumer Confidence

Australia – Trade Balance, ANZ Job Advertisements, AIG Services Index

US – Trade Balance, JOLTS Job Openings, NFIB Small Business Index, Consumer Credit

Europe – Swiss Retail Sales and Foreign Currency Reserves, French Trade Balance, German Industrial Production


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