British Pound Remains Weak as Brexit Parliamentary Vote is Called Off

Market Reviews

On currency markets, the British pound stays weak after it became known that the Brexit parliamentary vote is called off and UK Prime Minister Theresa May is going back to the EU to seek changes on the deal. The pound remained near 20-month lows against the US dollar. Australian dollar is the strongest one, followed by Japanese yen. Canadian dollar is the weakest one for today, followed by US dollar, and euro.

On stock markets, DOW initially dropped to low 23881.47 but closed up 0.14%. S&P 500 dropped to 2583.23 but closed up 0.18% at 2637.72. NASDAQ fell to 6878.98 but closed up 0.74% at 7020.52. In Asia, Nikkei fell by 0.25%. Hong Kong HSI added 0.02%, Shanghai SSE gained 0.18%, Singapore Strait Times dropped 0.48%.

Yesterday, British Prime Minister Theresa May formally confirmed in the Commons that the Brexit vote will be delayed. Theresa May said she’ll hold emergency talks with EU to discuss possible changes to the backstop. European Council President Donald Tusk stated that they will discuss Brexit at the December 13/14 scheduled EU meeting. But he emphasized that “we will not renegotiate the deal, including the backstop”.

China and the United States discussed the road map for the next stage of their trade talks on Tuesday, during a telephone call between China’s Vice Premier Liu He and US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer. It was noted that “both sides exchanged views on putting into effect the consensus reached by the two countries’ leaders at their meeting, and pushing forward the timetable and roadmap for the next stage of economic and trade consultations work.”

Today’s data showed, that Australia NAB business confidence dropped to 3 in November, down from 5. Business conditions dropped to 11, down from 13. Australia house price index fell for the third quarter by -1.5% qoq in Q3, matched expectation. Over the year, house priced dropped -1.9% yoy. Japan BSI large manufacturing index dropped to 5.5 in Q4, M2 rose 2.3% yoy in November.