14/11/2018 - Sterling Bets On Brexit Agreement

GBP

After a quiet start to Tuesday, Sterling surged as investors bet a Brexit agreement with the European Union was imminent. Late in the day, media reports were circulating that Theresa May would hold a cabinet meeting on Wednesday to sign off the Brexit divorce deal. A UK Government source also leaked that the text of a withdrawal between Britain and the EU had been agreed.

This followed on from earlier reports that Brussels and London had agreed on a text that deals with the Irish border question, the traditional sticking point of the agreement. There was no concrete statement to follow this, but does stay in line with the timeline to get agreement on a draft deal by the end of Wednesday at the latest if there is to be a summit this month to approve it. This optimism may not be long term as the DUP made it clear that their ‘red lines’ on the deal remained the same.

Tuesday also saw the release of the Average Earnings figures, which surprised on the upside. Data showed that British workers’ underlying pay rose at the fastest pace in nearly decade in the three months to the end of September as it came in at a positive 3.2%, against an expected 3.1%.

Key Announcements

08:00 - EUR: German GDP Figure; Expected to come in at -0.1%
09:30 - GBP: Core CPI Figure; Expected to increase to 2% from a previous 1.9%
09:30 - GBP: CPI Figure; Expected to increase to 2.5% from a previous 2.4%
10:00 - EUR: Eurozone GDP Figure; Expected to stay at 1.7%
13:30 - USD: CPI Figure; Expected to increase to 0.3% fron 0.1%