European markets end higher
A couple of positive political developments helped push European markets higher, while Wall Street benefitted from the stronger than expected US jobs data.
The Brexit breakthrough was welcomed by investors, and even the pound losing its early gains helped the UK market, packed as it is with overseas earners which are helped by a weak sterling. In Germany, hopes that the current impasse in forming a coalition government could be resolved lifted the Dax higher. The final scores in Europe showed:
- The FTSE 100 finished up 73.21 points or 1% at 7393.96
- Germany’s Dax rose 0.83% to 13,153.70
- France’s Cac closed 0.28% higher at 5399.09
- Italy’s FTSE MIB climbed 1.4% to 22,773.80
- Spain’s Ibex ended 0.57% better at 10,321.1
- In Greece, the Athens market added 1.64% to 740.72
On Wall Street, the Dow Jones Industrial Average is currently 102 points or 0.42% higher.
On that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back next week.
The early excitement in the pound following the morning’s Brexit news was well and truly short lived, and sterling is now down 0.7% against the dollar at $1.3370. In the wake of the deal news it climbed as high as $1.3519. David Madden, market analyst at CMC Markets UK, said:
At the start of the session, sterling was gaining ground on the back of the announcement that the UK and the EU had made sufficient progress in the first phase talks, so it can now move onto the discussions about trade. The early positive momentum in sterling, ran out of steam and it then the pound turned negative – which propped up the FTSE 100.
Part of the reason for the fall was the EU telling the UK that trade talks would not start until February.
Updated
Ratings agency Fitch has also opined on the Brexit news from this morning, and like S&P, says it has no immediate effect on its AA rating and negative outlook:
The agreement between the UK and the EU to move to the next phase of Brexit negotiations is a step towards a potential agreement on Brexit and trade, but the process remains lengthy and challenging, and the deal leaves many key uncertainties unresolved...
The progress report’s carefully crafted language fails to clarify how the UK can achieve all three of its commitments to leave the EU single market and customs union, ensure Northern Ireland retains “unfettered access” to the UK internal market, and avoid a hard border between Northern Ireland and the Republic of Ireland. It states that “in the absence of agreed solutions, the UK will maintain full alignment with those rules of the Internal Market and Customs Union which... support North-South cooperation”. This would appear to maintain the status quo if a trade deal is not agreed, but we think it would be politically very difficult for the UK government to guarantee regulatory equivalence between Northern Ireland and the Irish Republic in this event.
More broadly, the negotiation process leading up to today’s announcement has strained UK domestic politics, highlighting how June’s general election has weakened policy cohesion, reflecting divisions in parliament and among the UK public regarding the desired post-Brexit relationship with the EU, and meaning the final outcome of negotiations remains uncertain.
Fitch concludes:
Overall, today’s announcement does not alter the view we expressed when we affirmed the UK’s ‘AA’ sovereign rating in October, that the complexity of the issues, the magnitude of national interests at stake, the lack of a clear UK position, the EU’s negotiating stance, and the limited timeframe will make it challenging for the UK to secure a favourable trade agreement. The Negative Outlook on the rating reflects the uncertainty and corresponding downside economic and fiscal risks.
Any bursting of the Bitcoin bubble is unlikely to have a major impact on the global economy, says Capital Economics. The consultancy’s Andrew Kenningham says:
Unlike the bubbles in the tech sector in the late-1990s and in US residential property a few years later, a bursting of the bitcoin bubble should not have systemic, macroeconomic implications. The total value of bitcoin is (still) too small, and it has few links with the wider economy.
...As with many start-ups, the “true” value of bitcoin is unknown because it is unclear whether it has a long- term future. But we doubt that any cryptocurrency will become a serious rival to the dollar or other major fiat currencies, many of which have centuries of history behind them and the backing of governments and central banks. Also, technological problems, fraud or tighter regulation may undermine bitcoin. And even if cryptocurrencies in general have a future, one of bitcoin’s numerous competitors, or a central bank digital currency, could kill it off just as plenty of early rivals to Facebook and Google were sunk without trace.
Given this uncertainty, it makes sense that bitcoin is often compared to the famous Dutch tulip bubble. Like bitcoin, tulips became popular “because of their strangeness and rarity” and because they were new, having arrived from the Ottoman Empire in the late 16th century. Their prices rose astronomically between 1634 and 1637 and then collapsed. But the crash apparently had little impact on the Dutch economy.
There are several channels through which a bursting asset price bubble can, in principle, have macroeconomic consequences, but none are a major risk in the case of bitcoin.
First, there may be a hit to household spending as people who have invested suffer losses. But bitcoin’s market capitalisation is too small for this to be a worry. It is currently around $240bn, which is much smaller than the total value of gold outstanding ($8trn) or the value of Apple ($0.9trn). If the price of bitcoin fell to zero today, the paper losses would be equivalent to a 0.6% fall in US equity prices. As most investors have bought bitcoin at much lower prices, the relevant losses would arguably be smaller.
While a bursting bubble can affect the economy via the banking sector, this is not much of a risk either, precisely because bitcoin is held and traded outside the banking sector. Also, there is no evidence that people are taking out huge, sub-prime mortgages to finance their speculation in cryptocurrencies.
A slump in bitcoin prices should not have much effect on wider investor and business confidence either. As we have pointed out elsewhere, there is no correlation between the prices of bitcoin and other risky assets, so a fall in its price should not affect wider financial conditions. And nor would it tell us anything about wider market sentiment.
Back with Bitcoin, and JP Morgan boss Jamie Dimon - a notable critic of the cryptocurrency - has been commenting again. He told CNBC:
JUST IN: JPMorgan Chase CEO Dimon tells @WilfredFrost he remains "highly skeptical" about bitcoin. https://t.co/jn8limUSe7 pic.twitter.com/xvmz37kcr6
— CNBC Now (@CNBCnow) December 8, 2017
US consumer confidence dips in December
US consumer confidence has slipped back compared to last month, partly due to Democrat voters concerned about the effects of the proposed tax changes.
The University of Michigan’s initial consumer sentiment reading for December has come in at 96.8, compared to November’s 98.5 and expectations of a rise to 99.
The survey’s chief economist Richard Curtin said:
Consumer sentiment has remained quite favorable although it continued to slowly recede in early December from its October cyclical peak. Most of the recent decline was concentrated in the long-term prospects for the economy, while consumers thought current economic conditions have continued to improve.
Importantly, the largest decline in long-term economic prospects was recorded among Democrats, which reflected their concerns about the impact of the proposed changes in taxes.
Perhaps the most important changes in early December were higher income expectations as well as a higher expected inflation rate in 2018. Income gains have been slowly improving during the past year, and the data indicate that trend has continued. In contrast, the rise in inflation expectations in early December was a surprise, and confidence in this finding must await confirmation in the months ahead before any inferences are drawn. Buying plans for durables have improved in early December, largely due to attractive pricing, in contrast to the rise in the expected inflation rate. Overall, the data signal an expected gain of 2.7% in real consumption expenditures in 2018.
Updated
Greek finance minister Euclid Tsakalotos is about to begin a round of talks in the US aimed at the debt-stricken country re-accessing markets next year. Helena Smith reports:
After eight years of being exiled from international capital markets, Greece hopes to refinance itself for the first time in nearly a decade when its third international bailout programme expires next August. The politics of regaining market access are expected to dominate discussions Tsakalotos is to have in the US, starting today. Auditors representing the European creditors that have kept Greece afloat are also there.
The Marxist economist, who has allowed pragmatism to prevail over ideology in his job as finance minister, will be the keynote speaker in the annual Capital Link Invest in Greece Forum on Monday. Interestingly, he has been selected to ring the closing bell at the NYSE on Tuesday. Insiders are interpreting the move as an incipient signal of renewed optimism in the Greek economy.
As for that jobs data, it continues its record breaking run:
86...
— Charlie Bilello (@charliebilello) December 8, 2017
As in 86 consecutive months of jobs growth, by far the longest streak in history.#payrolls pic.twitter.com/5Yf6W4RBZ8
Wall Street opens strongly
The better than expected jobs data has seen a positive opening on Wall Street, while European markets continue to be buoyed - partly - by the day’s Brexit news.
The Dow Jones Industrial Average is currently up 70 points or 0.29%, with a US rate rise next week now seen as virtually inevitable despite the weaker than expected wages growth. Meanwhile the S&P 500 opened up 0.37% and the Nasdaq Composite rose by 0.7%
Elsewhere the FTSE 100 has climbed 0.87%, Germany’s Dax is up 1% and France’s Cac has climbed 0.44%.
Over at Bitcoin, and the cryptocurrency is now down around 8% at $15,200.
Bitcoin trades "quietly" relative to yesterday's rally pic.twitter.com/MeqXo4EcP6
— DailyFX Team Live (@DailyFXTeam) December 8, 2017
Back with Brexit, and S&P Global Ratings says the UK’s credit rating at AA and its negative outlook is not immediately affected by this morning’s deal. It says:
The EC has announced that the UK has made “sufficient progress” in the first phase of the Brexit talks, which now paves the way for the EC to formally open the next phase in its summit on December 14 and 15. The EU’s chief negotiator, Michel Barnier, has signalled that a final agreement will have to be reached by October 2018. This leaves only 10 months for the UK to agree with the EU a framework for their future relationship, including a trade deal, and transitional arrangements.
A final agreement will have to be approved by 27 national parliaments ahead of the March 2019 exit date.
While sufficient progress has been made during the first phase, many issues are yet to be fully resolved. The situation is further challenged by the UK’s slowing domestic economy, the lack of a parliamentary majority, and by the absence of consensus within the government on the shape of the final relationship with the EU. Indeed, these considerations contributed to the slow progress during the first phase of negotiations. The negative outlook reflects the continued institutional and economic uncertainty surrounding the Brexit negotiations and the UK’s future relationship with the EU after the country’s departure from the bloc in March 2019.
Updated
The dollar is dipping after the weaker than expected US wage growth outweighed the stronger jobs figures.
Traders are selling the US Dollar after a strong jobs report is by weak wage growth. pic.twitter.com/XO02wgTDt5
— DailyFX Team Live (@DailyFXTeam) December 8, 2017
But economists believe that wage weakness will not deter the Federal Reserve from raising US interest rates at its meeting next week. James Smith at ING Bank said:
For markets, a further disappointment in wage growth will be the key takeaway from today’s data. November’s growth in average hourly earnings came in below consensus at 0.2%, following a downward revision to October’s figure, although it’s still probably worth taking these numbers with a pinch of salt. Back in September, the job losses from the hurricanes were highly concentrated in low-wage sectors, and taking them temporarily out of the sample artificially boosted the average level of pay. November’s disappointment could simply be a further correction to this blip.
A similar logic can probably be applied to the payrolls numbers. On the face of it, a 228,000 increase in jobs during November looks good, but at least some of this is probably down to people returning to work after the disruption. Either way though, policymakers are less bothered by jobs growth these days - they know that the rate of employment growth should be expected to slow as the remaining slack in the economy erodes.
Given all the noise, the Fed will most likely write off this latest jobs report. Wage growth was disappointing, but given the sheer strength of the jobs market, we would still expect pay to accelerate gradually through next year. More broadly, we agree with the Fed’s assertion that most of this year’s inflation dip was ‘transitory’. Throw in 3% economic growth next year, as well as the hawkish rotation in regional Fed voters, and we expect a rate hike next week to be followed by three more in 2018.
US jobs report paves way for Fed rate hike next week
A stronger than expected rise in non-farm payrolls has reinforced expectations that the US Federal Reserve will raise interest rates next week.
Paul Ashwell, chief US economist at Capital Economics, gives his view:
The slightly bigger than expected 228,000 gain in non-farm payrolls in November all but guarantees another 25 basis point interest rate hike by the Fed next week, particularly with the unemployment rate unchanged at an unusually low 4.1%.
The 228,000 rise in non-farm payrolls last month was driven by job creation in professional services, manufacturing, and health care, the US Labor Department said.
The department gave some context behind its recent revisions, which it said painted a brighter picture overall:
The change in total non-farm payroll employment for September was revised up from +18,000 to +38,000, and the change for October was revised down from +261,000 to +244,000.
With these revisions, employment gains in September and October combined were 3,000 more than previously reported. After revisions, job gains have averaged 170,000 over the last 3 months.
Breaking: US jobs report stronger than expected in November
Non-farm payrolls rose by 228,000 in November, beating expectations of 200,000.
But the figure for October was revised down to 244,000 from an earlier estimate of 261,000.
The jobless rate was unchanged at 4.1%, while average earnings increased by 0.2%, following a 0.1% fall in October. It was below expectations of a 0.3% pick-up in pay.
Pound falls after earlier gains
The pound is now down against both the dollar and the euro, after rising earlier in the day against both currencies.
The relief rally prompted by progress on Brexit talks appears to have faded away.
The pound is down 0.5% against the dollar, at $1.3405, and down 0.3% against the euro at €1.1409.
Back to Brexit, and the Institute of Directors says firms are breathing “a huge sigh of relief” after talks progressed.
Stephen Martin, director general, adds:
The most pressing concern for UK companies has been their EU staff, who have urgently needed certainty about their future in this country. We have grounds to hope now that our members will be able to send their employees off for the Christmas break feeling more comfortable about their status here.
We call on the UK and EU to build on this positive momentum going into the new year. It is overwhelmingly in the interests of both sides to begin working on our future economic relationship - particularly in order to fully address the Irish question. And we look forward to further clarity about what the UK’s objectives are for that new relationship as well as a firm commitment on transition in the very near future.
Coming up: closely watched US jobs report
The US Commerce Department is due to publish the non-farm payrolls report for November at 1.30pm UK time.
Economists polled by Reuters are predicting that the US economy created 200,000 jobs last month, down from 261,000 in October.
The unemployment rate is expected to remain at 4.1%.
David Madden, analyst at CMC Markets, says:
When it comes to the US jobs report, the devil is always in the detail so keep an eye out for revisions to previous reports.
The average earnings figures will be closely watched too. On a monthly basis, average earnings are expected to jump to 0.3% from 0.0%, and on year-on-year basis it is anticipated to rise to 2.5% from 2.4%.
Wage growth has been lagging behind that of job creation growth, and we will need to see a steady rise in earnings if the US economy wants to have a sustainable recovery.
Britain's trade deficit widens in three months to October
Britain’s trade deficit with the rest of the world widened in the three months to October, figures published earlier by the ONS show.
The UK continues to import more from the EU and the rest of the world than it exports to other countries.
Excluding some commodities such as gold shipped in and out of London, which statisticians say can distort the figures, the UK’s trade in goods and deficit widened by £800m to £6.9bn in the three months to October.
NIESR: UK economy grew 0.5% in three months to November
The National Institute of Economic and Social Research estimates the UK economy grew by 0.5% in the three months to November.
That would be an slight improvement on the 0.4% growth achieved in the third quarter, between July and September.
Amit Kara, head of UK forecasting at the think tank, said growth was being driven by the services sector and industrial production, while construction remained under pressure.
He added:
UK economic activity has picked-up in the second half of this year and GDP growth at 0.5 per cent is somewhat higher than the economy’s speed limit.
If, as we expect, the economy continues to expand around this pace and inflation remains elevated, there is a case for the Bank of England to gradually raise the policy rate to stop the economy from overheating.
Consistent with that view, our latest forecast for the UK is conditioned on a 25 basis points increase in Bank Rate every six months such that the policy rate reaches 2 per cent in 2021.
The pound is still up against the euro at €1.1463 after this morning’s Brexit breakthrough, but it has failed to hold on to earlier gains against the dollar, because the US currency is also performing well on tax plan hopes.
Gold is another victim of the dollar’s strength:
Dollar rise pushes gold toward biggest weekly fall since May https://t.co/khasvKbJ6S
— CNBC (@CNBC) December 8, 2017
UK Finance, the banking industry’s trade body, says most of the hard work on Brexit - the aspects that will determine decisions on jobs - is yet to be done.
Stephen Jones, chief executive:
Today’s announcement is certainly a positive step, making important progress in the negotiations and bringing a welcome and significant clarity on the rights of EU citizens living and working in the UK.
But the agreement on phase one issues is just the start - we now need to see the detail and further action on those issues that will determine the real impact of Brexit on the economy, consumers and jobs.
Businesses need to see clear progress in the New Year on the future trading relationship and how we will transition to any new arrangements to ensure we can continue to meet the needs of customers.
Kathrin Muehlbronner, lead sovereign analyst for the UK at Moody’s, says Brexit progress is currently panning out as the ratings agency expected, with the toughest challenges ahead:
The announcement this morning that the UK and the EU have reached “sufficient” progress in the withdrawal negotiations is in line with what we expected. We expect the EU summit on 14-15 December to endorse the Commission’s recommendation, meaning that negotiations will now move on to finding agreements on a transition period and a new trade relationship.
Our baseline scenario assumes that the two sides will agree on a two-year transition period beyond March 2019, that will give some additional time to find a reasonably good new free trade arrangement. But it is clear that these negotiations will likely be even more difficult than those just concluded on the principles of the UK’s withdrawal.
Surprise fall in UK construction output
UK construction output fell 1.7% in October, coming in well below economists’ expectations of a 0.4% rise.
The fall was driven by a drop in both new work and in repair and maintenance.
The ONS explains:
Construction output fell by £211 million compared with September 2017. As in the three-month on three-month series, the fall stems primarily from a decrease in repair and maintenance, with non-housing repair and maintenance falling by £73 million.
Private housing also provided a notable drag on output, also decreasing by £73 million. Elsewhere, private commercial work also fell sharply, decreasing for the second consecutive month, falling by £58 million in October 2017.
The only positive contributions to the month-on-month construction output came from infrastructure and private industrial work, which grew by £36 million and £14 million respectively.
Official UK #construction data have come back into line with #PMI survey data in recent months, but both tell a disappointing story. #ONS data now show the sector has seen output fall in 6 of the past 7 months pic.twitter.com/FI90qr49ST
— Chris Williamson (@WilliamsonChris) December 8, 2017
Updated
City of London: Christmas has come early in Brexit talks
The City of London has welcomed the breakthrough in Brexit talks, saying “Christmas has come early” for financial firms.
Catherine McGuinness, policy chairman of the City of London Corporation:
Christmas has come early for financial firms with the news that Brexit negotiations can now move to Phase 2. Government has made a bold but necessary step forward. But the hard work starts now.
The UK’s future trading relationship with the EU will mark one of the most important pieces of legislation in a century – it is vital we get it right first time.
The new trading relationship should be based on a free trade agreement, introducing a joint dispute resolution body and mechanisms for mutual market access. It would be based on regulatory alignment between the UK and EU with both parties working together to implement new global and international standards, replacing existing regulatory frameworks.
It is essential that government makes clear its aim to implement a transitional deal, clarifying exact timelines of when the transition phase will begin, what rules will apply to the UK in the interim and we need an indication of when the sector can expect to adopt the new rules.
Moving to #Phase2 of #Brexit negotiations is a bold but necessary step forward. Read my full response to today's progress here: https://t.co/KFvg6lH57G #BrexitBlueprint #IRSG
— Catherine McGuinness (@City_McGuinness) December 8, 2017
Updated
Industrial production should still make a positive contribution to UK growth in the fourth quarter, despite failing to grow month-on-month in October.
That’s the view of Ruth Gregory at Capital Economics, based on the sector’s rolling quarterly performance:
Industrial production fell short of the stellar pace indicated by some of the surveys. Indeed, output merely held steady in October and manufacturing output posted only a small 0.1% monthly gain.
Nonetheless, this was probably always to be expected after September’s strong monthly rise in both manufacturing and overall production. And the three-month industrial production growth rate remained at a still-strong 1.1%, suggesting that the sector is still on track to provide solid support to growth in Q4.
The rise and fall of UK industrial production since before the financial crisis:
UK industrial sector fails to grow in October
Industrial production was flat in October, following a 0.7% increase in September.
The weak performance was the result of a warmer than usual October according to the Office for National Statistics, because it resulted in a 3.3% fall in energy supply.
The ONS explains:
Within this sector, gas distribution and supply fell by 7.6%, the warmer than average temperature in October 2017 contributed to this fall. The Met Office reported that the provisional UK mean temperature was 11.3 degrees Celsius, which was 1.8 degrees Celsius above the 1981 to 2010 long-term average.
Manufacturing output - the biggest contributor to overall production - managed to scrape growth of just 0.1%.
Kate Davies, ONS senior statistician, said the longer-term picture was positive.
While manufacturing was relatively subdued overall in October despite record production of cars destined for export, the longer-term picture is one of strong growth.
Bitcoin dips below $15,000
Bitcoin dipped below $15,000, having surged ahead on Thursday.
It is currently down 10% at $14,951.
Piers Morgan is taking guidance on Bitcoin from veteran investor Warren Buffet:
'Never invest in anything you don't understand' - Warren Buffett.
— Piers Morgan (@piersmorgan) December 8, 2017
I think I'll give Bitcoin a miss....
Dollar boosted by US tax plan hopes
The dollar is on track for its biggest weekly rise in nearly six weeks as optimism grows that Trump’s tax bill will pass.
The dollar index, which measures the US currency against a basket of currencies, is up 0.2% at 93.95. It is up more than 1% over the week, its biggest rise since late October.
Reuters explains:
US Senate Republicans agreed to talks with the House of Representatives on sweeping tax legislation on Wednesday, amid early signs that lawmakers could bridge their differences and agree on a final bill before self-imposed Dec. 22 deadline.
Passage of the tax bill and strong data would strengthen the case for more US rate increases in the next year, a possibility which bond markets look unprepared for. The Federal Reserve is set to raise interest rates next week, but futures markets expect less than two rate hikes over the next year.
Britain’s manufacturers echo the BCC’s sentiments, with trade body EEF saying there are trickier negotiations ahead:
Stephen Phipson, chief executive of EEF:
Companies are relieved there is progress in the negotiations. But this is one step forward in a complex and long process. So we need to pin down the transition arrangements, which will be in place after March 2019, to ensure it’s business as usual for companies for as long as it takes until a final deal is reached. Until we get to that point, many businesses will need to prepare for any and every eventuality.
Many employers will be relieved that their EU employees have more certainty going forward, and government must now clarify the rights of EU citizens by Christmas so that they are not concerned about their future.
British Chambers of Commerce urges swift start to trade talks
The British Chambers of Commerce welcomed this morning’s breakthrough in Brexit talks, but has warned urgent progress must now be made on a trade deal with the EU, to allow UK businesses to plan for future.
Adam Marshall, director general of the BCC:
Businesses will be breathing a sigh of relief that ‘sufficient progress’ has been achieved. After the noise and political brinksmanship of recent days, news of a breakthrough in the negotiations will be warmly welcomed by companies across the UK.
For business, a swift start to trade talks is crucial to upcoming investment and growth decisions. Companies all across the UK want absolute clarity on the long-term deal being sought, and want government to work closely with business experts to ensure that the details are right.
Businesses want answers on what leaving the EU will mean for regulation, customs, hiring, standards, tariffs and taxes. The job of the UK government and the European Commission now is to provide those answers – and do everything in their power to ensure vibrant cross-border trade between the UK and EU countries can continue.
Ranko Berich, head of market analysis at Monex Europe, says the pound is benefiting from the Brexit “fudge” in Brussels:
The Brussels fudge that May and Juncker have served up this morning has gone down a treat for sterling. The pound is trading up against almost all major partners, and has reached a six month high against the euro.
This morning’s deal looks like a classic eurozone can kicking exercise. It’s now clear that Britain is seeking an agreement on regulatory alignment that will mean the overarching UK wide deal will satisfy Northern Ireland’s requirements. But in the plausible scenario where such a deal is not reached, today’s fudge hinges on Britain coming up with unspecified “specific solutions” that will avoid a hard border in Ireland.
Regardless of any future difficulties, for now the news is very positive, and next week’s leaders’ summit will conclude in celebrations, which the pound has already kicked off this morning.
Pound hits six month high against the euro
The pound climbed above €1.15 to the highest level in six months after that crucial agreement on the Irish border, which paves the way to the start of trade talks.
Updated
FTSE lags European peers in early trading
The FTSE 100 is roughly flat in early trading, lagging behind its counterparts in the rest of Europe which are all firmly higher this morning after that Brexit breakthrough.
The UK’s leading index tends to take a knock from a stronger pound as the listed multinationals make a large proportion of earnings abroad.
Here are the scores so far:
- FTSE 100: +0.04% at 7,323
- Germany’s DAX: 0.8% at 13,144
- France’s CAC: +0.5% at 5,413
- Italy’s FTSE MIB: +0.9% at 22,669
- Spain’s IBEX: +0.7% at 10,333
- Europe’s STOXX: +0.7% at 389
For all the latest developments on the Brexit negotiations in Brussels, follow our politics live blog:
The agenda: pound climbs after Brexit breakthrough and US non-farm payrolls
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The pound has received a boost this morning from the news of an overnight breakthrough in Brussels on the Irish border talks. The European Commission said “sufficient progress” had been made in the first phase of Brexit talks, paving the way for talks to begin on Britain’s future trading relationship with the EU.
The pound is up 0.3% against the euro at €1.1482, and up 0.3% against the dollar at $1.3517.
So traders are not getting too carried away, and rightly so according to Donald Tusk, president of the European Council, who cautioned that phase one was the easy part:
We all know that breaking up is hard. But breaking up and building a new relationship is harder.
Away from Brexit talks, it’s non-farm payrolls day in the US...
The agenda:
- 9.30am GMT: UK industrial production and manufacturing output for October
- 9.30am GMT: Britain’s trade performance in October will be outlined by the ONS
- 9.30am GMT: UK construction data for October
- 1pm GMT: The National Institute of Economic and Social Research will publish its estimate of UK growth in the three months to November
- 1.30pm GMT: US non-farm payrolls for November will provide the latest snapshot of employment and earnings in the world’s largest economy
Updated
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