EU reportedly accepts UK’s divorce bill

Yesterday’s markets

30th November 2017

  • All OPEC Meetings
  • USD - Prelim GDP q/q 3.3%
  • GBP - BOE Gov Carney Speaks

The Pound bounced yesterday as the UK and EU announced they are working together to break through the deadlock issues which are currently holding up the Brexit talks before the deadline next week. The EU have reportedly accepted the UK’s divorce bill offering and both sides are now working together to find a compromise on the Ireland border issue. Ireland’s EU commissioner, Phil Hogan, has mentioned he expects to see movement on the border issue in the next few days. UK Prime Minister, Theresa May, will be meeting with European Commission President, Jean-Claude Juncker, on Monday to formally present the UK’s offering to the EU.

Across the pond, Pending Home Sales posted a bullish 3.5% yesterday, jumping up from -0.4% last month. Fed Chair, Janet Yellen, testified before the Joint Economic Committee of Congress on the US economic outlook. Yellen mentioned the low inflation levels were still puzzling but the Fed should continue to raise rates at a gradual level to stop growth getting too high, citing the Fed do not want to cause a boom-bust condition in the economy.

The US responded to North Korea’s missile test last night by urging all nations to cut their diplomatic and trade ties with the country. The latest ballistic missile test, which landed in the Japanese ocean, is reported to be able to reach the entire US. Oil is one of the main drivers of North Korea’s nuclear production and the US have asked China to cut off the oil supplies to them. As tensions continue to rise between the two countries, flows into safe haven currencies have strengthened.

Today’s markets

29th November 2017

  • EUR - CPI Flash Estimate y/y
  • USD - Unemployment Claims
  • NZD - ANZ Business Confidence

The Eurozone will release the CPI Flash Estimate figure today, expected to post 1.6%. Core CPI, which excludes foods, energy, alcohol and tobacco, is forecasted to post 1%. Inflation in the Eurozone is still registering below the ECB’s target of 2%. The Retail Sales Figure from the Eurozone’s largest economy; Germany, is also scheduled to be released at 0.3%. In the US, the Weekly Unemployment Claims figure is expected to post slightly higher than last week at 241K. Two FOMC members will be speaking. Randal Quarles at the Financial Stability and Fintech Conference about payment systems, and Robert Kaplan will be taking part in a panel discussion at the Real Estate Council in Dallas.