Never miss a story from Ilya Spivak

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Ilya Spivak

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

TALKING POINTS – BRITISH POUND, CPI, BREXIT, EURO, YEN

  • Pound may continue higher as PM May survives no-confidence vote
  • Markets likely to cheer progress toward a second Brexit referendum
  • Yen up as Nikkei falls, Euro extends drop on dovish Draghi comments

UK CPI data headlines the economic calendar in European trading hours. The headline inflation rate is expected to tick down to 2.1 percent on-year, The lowest since January 2017. The release might have captured the markets’ attention for its would-be implications for BOE monetary policy, but that seems highly unlikely as the fate of Brexit dominate the spotlight.

The British Pound rose yesterday as expected after Parliament voted down the UK/EU divorce plan championed by Prime Minister May. That may reflect hope that the result makes a second EU membership referendum more likely. MPs mostly oppose a “no-deal” exit and unanimous consent to extend the timeline from the EU-27 is unlikely. That may well leave asking voters to opine again as the way forward.

The markets seem to welcome this possibility. Composite polling data suggests support for staying within the regional bloc is just a bit better than even at 54 percent. If another referendum is held and the Remain side of the argument prevails, the entire destabilizing ordeal might be cast aside. If Leave wins the day a second time, Brussels may be compelled to ascent to an extension and offer some further concessions.

Moving toward another plebiscite will be slowed by consideration of a no-confidence motion against the Ms May tabled by Labour Party Leader Jeremy Corbyn. A vote is due today and looks likely to fall short of the support needed. The markets may cheer this too, thankful that a general election will not complicate the already convoluted situation. Sterling seems likely to rise accordingly.

YEN UP AS NIKKEI FALLS, EURO EXTENDS FALL ON DOVISH DRAGHI

The Yen traded higher as Japanese shares declined, boosting demand for the standby local anti-risk outlet. Most regional shares edged up however, offering a lift to the sentiment-linked Australian, Canadian and New Zealand Dollars. The Euro continued to decline in what looked like continuation of yesterday’s downswing following dovish comments from ECB President Mario Draghi.

See our market forecasts to learn what will drive currencies, commodities and stocks in Q1!

ASIA PACIFIC TRADING SESSION

Asia Pacific Trade Economic Calendar

EUROPEAN TRADING SESSION

Europe Trade Economic Calendar

** All times listed in GMT. See the full economic calendar here.

FX TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter