The European session rolls to a close with nothing on the calendar that had any effect on the market. In the Eurozone, the calendar was clean with nothing of importance being released today. Even in U.K., headlines from the UK Economic Calendar were quiet.
Brexit headlines, however, were not so quiet, with a second defeat in commons looming for PM Theresa May, she is expected to back down on Brexit date plan in order to avoid that. German Chancellor Merkel said EU leaders will move to Brexit phase 2 today, but added that a lot of work is still needed regarding migration. The threat of a no deal for the UK still looms as EU leaders voice their concern against the Conservative Rebels in the UK.
Back in the US, uncertainty surrounding the fate of U.S. tax reform is threatening to end what has been a stellar run for equities in 2017, as money managers dial back their appetite to take risk amid signs that the eight-year stock rally may not be far from its end.
PIMCO sees the good times rolling on in 2018 as global economies grow in sync, but the bond giant warned investors to brace for a downturn as central banks from the U.S. to Europe gradually tighten policy.
European markets were all lower, with the Stoxx Europe 600 Index following benchmarks from Hong Kong to Tokyo and Sydney lower, and down 0.4%, impacted by utilities and financials stocks post the marginally dovish ECB meeting.
As the European session whimpers out for the weekend, the US session comes into existence. The US session promises to be a bit livelier than the European session because of the Tax plan that is yet to be resolved in the Senate, as more and more problems that threaten to derail the whole project. The Economic Calendar in the US session, the only piece of economic news that might affect the markets would be the Empire State Manufacturing Index which is expected to drop slightly, which might be negative for the dollar.
With currencies trapped in familiar ranges, chat of the town this morning has been the widening EURUSD cross-currency basis swaps. The Ruble takes a leg lower after Russia cut key rates more than forecast, while the rand is aggressively bid going into the weekend ANC meeting where party head will be chosen. The dollar was on the backfoot as traders await the final details on the agreed upon tax-overhaul legislation from congressional Republicans.
GBPUSD – The market produces a base against the 1.3306-1.3299 support and concludes the early December consolidation, with upside bias into Friday.
USDJPY – The pair may feel attracted to double-moving average lines at 111.70-63 where stability likely to manifest.
EURUSD – The pair heads towards a neutral bias into Friday after mixed sentiment messages shown on Thursday and Wednesday.
AUDUSD – The bulls are controlling affairs despite mild stumble near 0.7693, the 200-DMA and overshoot risks to 0.7720-33 noted into Friday.
USDCHF – The Swissy retraces 50% if the December rally and may consolidate before pushing higher again and rising above 0.9936 is required to regain upside momentum.