Parliament recommences, market still focused on geopolitical tensions…
Yesterday, Parliament reconvened following the Christmas break. A debate kicked off regarding PM Johnson’s Brexit deal. No major developments occurred on their first day back but the pound came under renewed pressure as the prospect for market-moving Brexit related headlines increases. Sterling fell after an early-European spike, falling toward the €1.17 and $1.31 handles against the euro and US dollar, respectively.
The market is very much keeping a close eye on current geopolitical tensions. Headlines last night that Iran fired missiles at joint US/Iraq positions sent risk assets tumbling, although they’ve regained their composure heading into the European open. As mentioned yesterday, this situation does not look like it will be going away anytime soon. As a result, close attention should be given if you’re exposed to a higher risk currency. Due to ongoing political concern and a weakening economy, the pound is deemed to be one of the riskier currencies.
Today’s economic calendar is very light. The one major report which many will be focusing on is the warm up to Friday’s non-farm payrolls. At 13.15 today, ADP employment will be released from the US. This covers private hiring across the US in December and is one of the major components in the overall NFP number.
Written by Viv Savani. 8:39am, January 8th 2020
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