Brexit can kicked down the road

Anticipation sustains for the Brexit draft deal vote going into the fresh week with the British pound hanging on a line while market sentiment seen little changed on the back of trade developments.

The highly anticipated UK parliament vote on the Brexit draft deal turned out to be a vote to extend the time for consideration, though that appears to have done little to put off the market seeing both the British pound and the Euro still hanging near last week’s levels. GBP/USD just touch below last week’s highs, oscillating at $1.2930 levels while EUR/USD stayed above its 100-day moving average (DMA) going into the fresh week. The can is not kicked far down the road with UK prime minister Boris Johnson expected to seek a new ‘meaningful vote’ on his deal as soon as Monday with the countdown to the Brexit deadline. Whether this comes through will be one to watch and certainly for the cable still awaiting direction with bated breath.

As far as the IG client sentiment indicator is suggesting on the basis of retail contrarian, the earlier net long position which corresponded with the GBP weakness had significantly tapered off to the current neutral view on the back of the reduced hard Brexit expectations. This level of ambiguity on the outcome of the draft deal vote had seen to almost 50-50 long and short positions which also matches the near $1.30 handle situated at the midpoint of the $1.20-$1.40 fluctuation range since the Brexit referendum. Any breakthrough could finally see to a breakout of the 200-Week Moving Average.

Asia open

Asia markets have seen to a mixed commencement thus far with little in the pipeline to alter risk sentiment from last week. US earnings out from last week had also been a mixed bag seeing the 15% on the S&P 500 Index that had reported thus far, delivering with 82% earnings beat and a smaller 62% sales beat. As it is, investors remain in anticipation of the US-China phase one deal signing into November with the happy talk continuing from both sides on the progress made. Interest had shown to be high from both sides in making progress, but most are likely cognizant that difficult issues remain ahead.

For the day ahead, however, watch China’s October loan prime rate release in an otherwise quiet Asia session. Brexit updates alongside Germany’s CPI will be ones to follow later in the day.

Friday: S&P 500 -0.39%; DJIA -0.95%; DAX -0.17%; FTSE -0.44%


IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.