The Pound boosted overnight, as UK Prime Minister Theresa May was defeated in Parliament on her planned Brexit legislation. Tory rebels voted against her last night giving MPs a chance to vote on the final deal. Despite previously promising the House of Commons a meaningful vote, the decision last night will now mean there legally has to be a final vote. The Pound bounced as the decision could see a softer Brexit than the one May originally wanted.
Across the pond, the Fed announced their third rate hike of the year last night and paved the way for a further three hikes next year. In her last policy press conference as Chair, Janet Yellen explained how the Fed expect the labour market to remain strong, providing the opportunity for a rise in wages, allowing them to plan three hikes next year and two in 2019. However, they did acknowledge inflation may miss the ECB's target, with both FOMC members, Charles Evans and Neel Kashkari dissenting against the rise, as they are concerned about the low inflation. The Dollar was offered little support by the expected decision.
Both the UK and Eurozone’s central banks will be releasing their monetary policy summaries today. As neither the ECB or BOE are expected to raise rates, markets will be focusing on the policy summary releases for further information of their plans for next year. Also today, the 27 EU leaders will decide whether the UK has done enough to allow the Brexit talks to progress to trade.