GBP - British Pound
The European Union are expected to discuss the length of the Brexit delay today. An extension is looking most likely at present however the length is yet to be determined. Macron is in favour of a short extension (15th November) however many would prefer the longer extension (Jan 2020).
Johnson has agreed to the extension in principal, as long as the opposition agrees to a General Election on December 12th 2019. Johnson may have a problem rallying support for the motion. He needs votes from 2/3 of MPs however due to Labour’s lack of support, this may be an issue. Contrary to a number of reports, Corbyn has claimed that he will support an early election as long as Johnson takes a no-deal Brexit off the table. GBP/USD is trading around the 1.2850 handle with an extension priced into the market. Expect brief spikes of volatility as the market reacts to news later.
Yesterday saw the release of a spread of European data. There were positive signs for the French economy after both Services and Manufacturing PMIs came in better than expected. However, this was not the case in Germany or European PMIs as a whole, which came in worse-than-expected once again. German data was once again in the red zone and it’s looking like another period of contraction for the EUs largest economy. In other news, the ECB left the European interest rates unchanged on Draghi’s final ECB meet.
Across the pond, US Production came in at -1.1%, showing once again that the global trade war is starting to really take its toll on the world’s largest economy. Investors are still waiting for escalations on the US-China trade war phase-one deal.