Market News & Analysis
GBP rallies on failed Brexit vote; US markets close higher
Upcoming high impact news:
10:30 AUD Westpac Consumer Sentiment
20:15 GBP BOE Governor Carney speaks
20:30 GBP CPI data y/y
Well the U.K. Parliament has done exactly what everyone expected, and the GBP is now rallying against the majors. Prime Minister Theresa May’s Brexit plan was thrown out the window overnight after MPs voted against her proposal. A staggering 432 lawmakers voted against the deal, with May only gaining 202 votes in favour, a much bigger loss then anticipated. May will now face a second confidence vote as leader of the conservative party, called upon by her opposition.
The Great British Pound initially fell before bouncing on the news, rising 18 pips in two hours against the USD, to 1.288. The pair is now at its highest level since November 22, when the United Kingdom and European Union agreed on a post-Brexit relationship. The GDP has also strengthened against the Euro this morning with the EUR/GDP pair trading at 88.64. Movements are expected to remain volatile throughout the morning ahead of a speech by Bank of England Governor Mark Carney on a financial stability report. The United Kingdom will also release its latest round of monthly CPI data, which is forecast to come in at 2.1%.
Locally, the Australian dollar remains barely above 72 US cents and 95.5 against the CAD. The AUD/JPY pair was trading at 78.28 at 08:30 AEDT. The AUD also experienced moves higher after the Brexit vote. On the data front, consumer spending will be in focus as Westpac prepares to release its monthly Consumer Sentiment data at 10:30am.
The ASX is expected to open in the black with the SPI futures 4-points higher. It follows a rally on U.S. markets overnight with Netflix shares leading gains on the Nasdaq, after announcing a rise in membership fees. The Dow Jones rose 155 points or 0.65% while the S&P 500 closed above 2600 points.
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