Originally published by AxiTrader
London/NY wrap:
- Quiet session with no major economic data releases
- Euro Zone Industrial Production declined by 1.7 percent in November (vs -1.5 percent expected)
- Former Fed Chair Yellen thinks we might have seen the last hike of the cycle by the US central bank
- S&P 500 finished the trading day slightly lower
- Gold gained $4 on the day as uncertainty remains high
- The recovery in WTI has stalled; the commodity is slowly approaching the psychologically important $50 level
Forex:
A lack of economic data and events led to a quiet start into the new trading week. Most major currency pairs consolidated in a rather tight range, with Cable being the only exception. GBP/USD rallied on rumours that the ERG could support UK PM May tomorrow. However, this was misinterpreted in the beginning, as the ERG backing May´s deal is linked to a prerequisite that is unlikely to happen. Cable retraced most of its gains in the late London session.
The focus in the next 24 hours will be on the Brexit vote in the UK parliament. There is not confirmed time, but it is expected to happen between 7-9 PM local time. The market is expecting May to fail, and it does seem like the most likely outcome. Should that be the case, traders should brace for a spike in GBP volatility.
The two major safe haven currencies - yen and Swiss Franc - caught a bid today, as weak Chinese trade data led to concern that the effects of the trade war are increasingly being felt in the real economy. The Australian Dollar came under pressure and closed the day below 0.72 support.
The Session Ahead:
- No relevant data releases scheduled for the upcoming APAC session
- Some market participants might decide to stay on the side-lines ahead of the key Brexit vote
- The market is also waiting for an update on the trade talks between the USA and China