The UK and EU have failed to reach an agreement to move to the next stage of Brexit talks. What other market drivers do traders need to pay attention to? Get an overview here with 5 December Market moving fundamental events.
5 December, HotForex – The boost from U.S. tax cut hopes started to fade in Asia and equity markets mostly headed south, as investors moved out of tech stocks once again and into banks. The Nikkei closed down -0.37%, the Hang Seng is down -0.57%. U.S. futures moved higher, but UK100 futures are also down, as yesterday’s hopes of a Brexit deal that would pave the way for talks on trade and transition were smashed for now.
Long yields moved higher in Asia, although late gains in Bund futures yesterday and the prospect that the GER30 is likely to retreat further from yesterday’s highs, could see yields also coming down somewhat in early trade. The data calendar includes the final readings of Eurozone services PMIs for November, as well as the U.K. services PMI and EMU retail sales. German coalition talks and Brexit negotiations remain in focus ahead of next week’s EU summit.
European Market Outlook
USDJPY lifted marginally during the pre-European session in Asia. Higher U.S. Treasury yields helped lift the pairing in the face of generally lower stock markets in Asia-Pacific, which were afflicted by a resumption in the global tech sector selloff (the Nasdaq closed on Wall Street yesterday with a loss of just over 1%).
AUDJPY buying was seen following above-forecast retail sales data out of Australia, which was followed by a comparatively less dovish statement from the RBA governor following today’s policy meeting that left the cash rate unchanged at 1.5%.
No Brexit deal yet?
Meanwhile, in Europe, Cable has settled around 1.3470 after dropping to a 1.3412 low from levels above 1.3500, since there was no deal with regard to divorcing arrangements between EU and UK. PM May said during a press conference with EU’s Juncker that “differences remain” despite having a “constructive meeting.” Is also became clear that there would be no breakthrough deal on the Irish border at a meeting between May and Juncker.
For a while it seemed that a compromise deal had been reached, but May’s Northern Irish ally DUP criticised the leaked details earlier although May said there will be further talks ahead of the EU summit next week, which means there is still the chance that there will be sufficient progress for EU leaders to pave the way for early talks on trade and transition next week.
Main Macro 5 December Market moving fundamental events
- EU & German Service PMI – Expectations – unchanged at 56.2 and 54.9 respectively.
- UK Service PMI – Expectations –a headline of 55.0 after the 55.6 reading of the October survey.
- Canadian Trade Balance – Expectations – narrow to -C$2.6 bln from -C$3.2 bln in September.
- US ISM Non – Manuf. PMI – Expectations – 59.0 in November from 60.1.
Support and Resistance Levels
This article about 5 December Market moving fundamental events was written by Andria Pichidi, Market Analyst at HotForex. The provided article is a general marketing communication for information purposes only. It does not constitute an independent investment research. Nothing in this communication contains an investment advice or an investment recommendation. It also does not contain a solicitation for the purpose of buying or selling of any financial instrument.
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