British Pound Rises as UK and EU Agreed Declaration on Future Relationship

Market Reviews

Euro remains strong today. The attention of market participants was attracted by the minutes of the latest meeting of the ECB, which was held in October. The document noted that, in general, representatives of the ECB came to the conclusion that the incoming data are weaker than forecasts, but they indicate continued economic growth and a gradual increase in price pressure.

ECB policymakers “considered that the uncertainties related to global factors remained prominent, and the risks related to the external environment were assessed to be tilted to the downside.” On inflation, ECB policymakers consider “medium-term outlook for inflation, as contained in the September 2018 ECB staff projections, had been broadly confirmed.”

The British pound rose sharply against the US dollar, approaching a weekly high, responding to news on the Brexit. The EU spokesman said that the European Commission and Brexit British negotiators agreed on a declaration on future ties between the two sides.

It’s reported EU and UK “agree to develop an ambitious, wide-ranging and balanced economic partnership.” And “this partnership will be comprehensive, encompassing a free trade area as well as wider sectoral cooperation will be underpinned by provisions ensuring a level playing field.”

On stock markets, FTSE lost 1.04%, DAX fell 0.78%, CAC is down 0.60%. Earlier today, major Asian indices ended mixed. Nikkei gained 0.65%, Hong Kong HSI added 0.18% and Singapore Strait Times increased 0.09%. But China Shanghai SSE dropped 0.23%.

German 10 year yield is down -0.013 at 0.365. Italian 10 year yield is down -0.039 at 3.441. German-Italian yield spread is still above 300.