European Majors Remain Mixed After EU's Formal Endorsement of Brexit Deal

Market Reviews

The British pound and euro are trading mixed, as EU’s formal endorsement of the Brexit withdrawal agreement provides little support to the European major currencies. Commodity currencies are the strongest ones. Meanwhile, US dollar, Japanese yen and Swiss franc are trading lower today.

On stock markets, Japan Nikkei added 0.76% to close at 21812.00. Hong Kong HSI gained 1.56%. Singapore Strait Times increased 0.81%, but China Shanghai SSE fell 0.14%.

The British pound was little changed after European Union leaders gave their official endorsement of UK Prime Minister Theresa May’s Brexit withdrawal. Yesterday, the EU27 leaders approve the Brexit deal in the special EU summit in Brussels today. They endorsed both the Brexit withdrawal agreement, and the political declaration on future EU-UK relations.

Still, Theresa May needs to gain Parliamentary approval for the deal in Westminster to move forward with Brexit and failure could lead the UK leaving the EU without a deal. If the Parliament rejects the deal, the Government has until that day to put forward a new plan. The government is likely to use the brinkmanship strategy, threatening to leave the EU with no-deal on March 29, 2019, if the Parliament rejects the current agreement.

Today’s data showed, that Japan PMI manufacturing dropped to 51.8 in November, down from 52.9 in October and missed expectation of 53.0. That is the lowest level in two years.

The US will publish personal income and spending, jobless claims, pending home sales and FOMC minutes on Thursday. Eurozone CPI and unemployment rate will be released on Friday. Germany releases Ifo business climate index today.