The UK parliament deferred Saturday’s vote on Brexit, forcing Prime Minister Johnson to seek a delay from the EU. Forex traders are selling GBP/USD this morning after a spectacular rise over the previous seven sessions. Asia Pacific trading is off to a cautious start after US investors defied stronger earnings reports to mark major indices down.
The parliament passed an amendment to the bill that puts in place a Brexit deal agreed with the EU. The amendment requires the parliament to pass supporting legislation first. While the opposition is now proposing a second referendum, the BBC is reporting this morning that the PM now has the numbers to pass the bill this week. The pound rose from US $1.22 to within a whisker of $1.30 as traders anticipated the deal, and has now dropped to $1.29 on the delay.
The US SP500 index dropped 0.4% on Friday night despite generally better than expected company earnings reports. Financial stocks featured once again. However a miss by Coca Cola weighed on trading and dragged the Dow Jones Industrial Average down by almost 1%.
Commodity markets indicate re-emerging growth fears with both crude oil and copper under pressure. Gold has moved higher off important support at $1,480 and bond futures are weaker, despite comments from China’s Vice-Premier Liu over the weekend that talks on the phase-one trade agreement are progressing.
Regional stock futures are softer this morning, with the Australia 200 index off around 14 points. Today’s headline releases are Japanese trade data and Chinese home prices.
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