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High-Stakes in the House of Commons - EMEA Brief 04 Dec

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JoeIG

  • Theresa May will begin the five days of her House of Commons debate today, culminating in a historic vote on her Brexit compromise deal on December 11.
  • The Dow Jones closed 1.13% higher at 25,826.43 yesterday, whilst both the S&P and Nasdaq posted gains of 1.09% and 1.51 percent, respectively.
  • Asian shares fell on Tuesday as the optimism gathered from the US-China trade truce ends over doubts of a final resolution: the Hang Seng lost 0.3% as the ASX gave up 0.8% and Japan's Nikkei dropped 1.3% lower.
  • USD was 0.3% weaker against the yen, at 113.28.
  • Oil prices continued to rise on the back of the US-China trade truce and ahead of a key OPEC meeting this week in Vienna. US crude gained 1.2%, reaching $53.58 a barrel, whilst Brent crude is currently trading at $62.44 a barrel. 
  • Gold rose as a result of a weaker dollar, up 0.4% to $1,235.88 an ounce. 

UK, US and Europe: Five days of parliamentary debate are to begin today in the House of Commons, as Theresa May will try to secure backing on her compromise Brexit withdrawal deal, all culminating in a historic vote next Tuesday, on the 11th December. Currently, few MPs at Westminster are confident that the prime minister will win the vote, and many believe that May will suffer a defeat. A defeat next Tuesday could lead to a vote of no confidence and a parliamentary gridlock, likely resulting in further talks with Brussels to seek changes to the deal, or, in a more extreme case, a second referendum leading to a possible no-deal Brexit. 

In the rest of Europe, EU finance ministers have struck a reform deal after all-night talks in Brussels. The deal includes measures to bolster the Eurozone against future financial crises by equipping the banking union with more financial backing, and to give its sovereign bailout fund extra flexibility in its ability to help out countries. 

Looking ahead, volatility around GBP crosses at 9:15am GMT is likely to increase as the BOE's Mark Carney is due to speak at Parliament, along with three BOE Deputy Governors, about the Brexit Withdrawal Agreement before the Treasury Select Committee. We also have the UK Construction PMI release, which is an indicator of economic health and is expected to be lower than the previous month, signalling a slowdown in industry expansion. 

Economic calendar - key events and forecast (times in GMT)

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Source: Daily FX Economic Calendar

 

Corporate News, Upgrades and Downgrades

  • Altria, the maker of Malboro cigarettes, confirms they are in talks over a potential investment in Canadian cannabis producer, Cronos Group.
  • Zopa, the 13 year old P2P lender has become the first of its kind to secure a full UK banking license.
  • Unilever to acquire GSK's consumer nutrition business in a €3.3 billion deal.
  • Glencore's billionaire chief of copper, Telis Mistakidis, to step down amid US corruption probes of the commodity giant's Africa operations.

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