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DUP differ on Brexit borders

DUP differ on Brexit borders

The Pound rallied by almost 1% versus the US Dollar amid hopes that the UK and EU were on course to reach an eleventh-hour Brexit deal. The “divorce” bill, EU citizens’ rights, and how the border between Ireland and Northern Ireland will function are major topics blocking progress. Although, it appears the newspapers have found their panto villain.

However, despite their best efforts, Theresa May and Jean-Claude Juncker couldn’t get a deal agreed, saying talks will continue this week and they are confident sufficient progress will be reached before the EU summit in ten days. The Pound fell sharply on the news but has since stabilized.

The UK economy will release its November services PMI at 9:30am, which is expected to ease to 55.0 versus 55.6 booked last month. The PMI service released by both the Chartered Institute of Purchasing & Supply and the Markit Economics is an indicator of the economic situation in the UK services sector. Spillovers from positive sentiment in the domestic manufacturing industry and the Euro area services PMI should provide some support here.


The Dollar experienced a quiet day yesterday in terms of data as Factory Orders outperformed market expectations but still declined 0.1% for October.

The main headline for the Dollar during the early part of this week will be centred around the tax reform. There is a mixed bag of sentiment, however, with Michael Flynn set to testify in court. Market confidence in the currency was shown to be poor yesterday as the Dollar retreated against its major rivals as Cable hovered at 1.3465 and, against the Euro, saw highs of 1.1876.

That said, with the prospect of the House of Representatives and the Senate coming to terms on the tax reform, the Federal Reserve is looking to push for a faster pace of monetary tightening with surveys sourced from major investment banks suggesting a further three rate hikes could be possible in 2018.

The ISM non-manufacturing data is out today and will be watched for underlying trends in the economy as well as developments in the tax reform.


The Eurozone Sentix investor sentiment index declined to 31.1 for December from 34.0 previously and below consensus expectations. Eurozone yields moved higher, however, which provided net Euro support amid expectations of robust growth.

Data To Watch:
00:01 GBP BRC Like-For-Like Retail Sales (YoY) (Nov)
08:15 EUR Markit Services PMI (Nov)
08:55 EUR Markit Services PMI (Nov)
08:55 EUR Markit PMI Composite (Nov)
09:00 EUR Markit Services PMI (Nov)
09:00 EUR Markit PMI Composite (Nov)
13:30 USD Trade Balance (Oct)
14:45 USD Markit PMI Composite (Nov)
14:45 USD Markit Services PMI (Nov)
15:00 USD ISM Non-Manufacturing PMI (Nov)

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