The Day So Far…

Brexit talks continue to remain at the forefront of investors minds with Cable edging lower following the breakdown in yesterday’s talks with the EU after the DUP scuppered a deal being brokered. As we have mentioned here several times before we have been of the belief that the issue of the North-South border in Ireland was always going to be an incredibly complex issue to find a solution that appeases all parties and as such the progression in talks is now hinged on this sole point of contention. Reports earlier this morning suggested that Theresa May would be meeting with Arlene Foster but that has since been officially ruled out by the DUP leader who stated that they are still far away from a deal on the border issue.

The GBP sensitivity to this topic has now heightened, which was clearly evident in the volatile price action that was seen yesterday. As such, I would remain extra vigilant to further sources or leaks as we head through the day with suggestions that he UK PM wants to head back to Brussels as early as tomorrow to continue talks with her EU counterparts. Finally, on the UK front the latest Service PMI added to the gloom with the sector showing that growth had eased in November, while business activity slowed from October’s six-month high and job creation remained subdued.

The Day Ahead…

Looking ahead to the rest of the day the main economic data point is the ISM non-manufacturing PMI with some attention on the employment component ahead of the non-farms report this Friday. Despite the move off all-time highs in US equities our strategy still remains to find technically sound points to re-enter the market with a long position with the progression in recent US tax discussions supporting our view. Meanwhile, in the FX markets we remain agile to any breaking news on the Brexit front with the risk on balance being to the downside on any further breakdown in the on-going discussions.

 

Anthony Cheung
Anthony is a leading market commentator with over a decade of experience accumulated as Head of Market Analysis at a leading news and analysis organisation, and now a Director of Amplify Trading.