Summary:
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Stock markets gain as sentiment improves and Trump tweets
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Oil moving higher ahead of US inventory data
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GBP drops on reports of no-confidence vote in May
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4 options to avoid a Hard Brexit
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Bitcoincash falls by 10%
The sentiment around stock markets seems to have improved markedly in the last 24 hours after an attempted break lower yesterday was met with a fairly strong rebuttal. The US500 took out the October low of 2603 as things looked set to go from bad to worse, but buyers stepped in aggressively and managed to end with a green daily candle. Today, there has been further gains, but these have been pared somewhat into the European close. How the markets trade for the rest of the day could well be seen to set the tone for the rest of the week.
There's been steady gains seen in the energy complex today with both Oil and Oil.WTI rising thanks to an improving risk sentiment and a drop in Libyan output. The gains come after some heavy losses seen at the start of the week which has received a moderate boost after news that the National Oil Company in Libya declared a “force majeure” on exports from the El Sharara oilfield. Oil had been higher by as much as 2% but the rally has also faded like that in equities and traders will now look to US inventory data in the next 24 hours to see how the market reacts.
The pound has been under pressure this week and has just fallen to new lows below the $1.25 handle on reports that a vote of no confidence in PM May has been triggered after 48 letters were received. This is yet to be confirmed but it has weighed on the markets and there could be further declines as the Brexit mess continues to grow. The latest employment data has supported an attempted recovery in the pound this morning as it looks to recoup recent losses which saw the currency yesterday fall to its lowest level against the dollar in 20 months. In particular an unexpected rise in wages is seen as positive for sterling, with the 3.3% increase on a 3-month annualised basis coming in at its highest level in over 8 years. Having said that, this data pales into insignificance compared to the latest Brexit developments as far as the markets are concerned and on this front the ongoing uncertainty leaves the pound vulnerable to further declines.
After signing a divorce deal in Brussels all the British government had to do was to get it approved by the UK parliament. However, a fragile majority and conflict of political interest made it impossible, forcing Prime Minister May to cancel the vote originally planned for 11 December. Is the UK doomed for Hard Brexit? What are the solutions left ahead of the 20 March 2019? Read more here.
Last but not least is cryptocurrencies where the recent declines show little sign of abating. Bitcoincash is the worst performing market and lower by over 10% on the day. The capitalization of the whole cryptocurrency market sits around the $110 billion mark. Calgary, a large Canadian city, has created its own digital currency and it has become the first city in Canada having its own virtual money. It was announced by the finance minister of Alberta, a Canadian province, on Friday, as Global News reports. The cryptocurrency, dubbed as Calgary Canadian Dollar, will operate exclusively in the City of Calgary. The idea of the city’s cryptocurrency is a part of the broader initiative focused on small businesses and nonprofits in Calgary.
