The British pound fell this morning after the UK parliament rejected Prime Minister May’s revised plan for a negotiated Brexit. Volatility is likely to continue as parliamentary votes over the next two days will determine next steps for the UK.
Commodity and bond prices rose, reflecting increasing expectations that global monetary policy will remain accommodative, although shares were mixed.
Data overnight was also mixed. UK GDP, industrial production and services industries all surprised on the upside, but US CPI recorded a slight miss, feeding the dovish narrative. Focus turns to Japanese producer prices today, expected to show an increase after last weeks’ better than forecast GDP.
Futures markets are pointing to similarly soft trading in the Asia Pacific region. Nikkei and S&P/ASX 200 markets are slightly lower, but the Hang Seng is modestly higher. The Australian dollar is higher, reflecting trader enthusiasm for both precious and base metals, as well as crude oil.