· The British pound stabilised on Thursday as the Brexit project entered a fresh holding pattern, while the dollar held firm as traders took a breather from Sino-U.S. trade headlines.
Sterling held at $1.2911 after Britain’s parliament backed a withdrawal deal, but rejected the government’s tight timetable, while European Union members delayed deciding whether to grant a three-month extension to the Oct. 31 leaving date.
Commonwealth Bank of Australia analysts reckon the pound will stay rangebound between $1.3000 and $1.2800 until things become clearer.
Against a basket of currencies the dollar was flat at 97.459.
It stood at 108.65 yen, and drifted higher from a five-week low touched against the kiwi on Tuesday.
The Chinese yuan was flat at 7.0623 in offshore trade.
The euro held at $1.1132 with traders looking to euro zone manufacturing and services data and the outcome of a European Central Bank meeting, both due later on Thursday.
The ECB is all but certain to leave policy unchanged on Thursday, six weeks after its last meeting at which it launched new asset purchases, a rate cut and a pledge to open the money taps further if needed.
· Business decision-makers in Asia Pacific cite the prospect of a global recession and the impact of trade tariffs as the biggest risks for their companies in the next six to 12 months, according to a survey from J.P. Morgan.
The impact of global trade tariffs was a top concern for about 27% of the respondents, while 24% said they were worried about a slowdown in emerging markets, 10% revealed cyber threats were a primary worry and 9% pointed to Brexit and the future of the eurozone.
· Despite unprecedented monetary stimulus, Draghi has fared worse than his two predecessors on inflation, falling well short of the goal of below, but close to, 2%. The rate was 0.8% in September, the lowest in almost three years.
Officials have pledged to pursue record-low interest rates and large-scale asset purchases until price growth is firmly in line with the target, which they don’t expect until after 2021. Investors are trying to judge whether more rate cuts will be needed, and how long quantitative easing can run without the ECB hitting self-imposed limits on how much debt it can buy.
ECB chief economist Philip Lane said last week that the currency bloc is facing a more extended slowdown than previously anticipated amid global trade tensions. Consumer confidence is at the weakest this year, and a survey of purchasing managers showed Thursday that the economy remained close to stagnation at the start of the fourth quarter.
While euro-area officials expect a downgrade to growth forecasts in December, that may not be enough to provoke more action though. Last month’s divisive decision has left little appetite to add to more stimulus any time soon.
· His legacy will form around three words — “whatever it takes” — but as President Mario Draghi prepares to leave the helm of the European Central Bank (ECB), questions are emerging about the success of the policy tools he helped to implement.
“Ironically, the end of Draghi’s presidency coincides with a time of growing skepticism about the effectiveness of monetary policy and growing calls for a more active role for fiscal policy,” Silvia Dall’Angelo, senior economist at Hermes Investments, told CNBC via email.
· Democratic lawmakers hope to complete their impeachment inquiry into President Donald Trump by year’s end and are coalescing around two articles of impeachment - abuse of power and obstruction, lawmakers and aides told Reuters.
But some Democrats fear that a costly distraction may be the looming battle between the Republican Trump and Congress over funding the government when money runs out for many federal operations on Nov. 21, Democratic aides said.
Some Democratic lawmakers said they believed they already had gathered enough evidence from the testimony of current and former U.S. officials to impeach Trump for asking Ukraine to investigate a political rival, Joe Biden, a leading contender for the Democratic presidential nomination in 2020.
Other Democrats were more cautious and said more information was needed to solidify the case for impeachment and make it an easier sell to a deeply polarized American public. Only two U.S. presidents have been formally impeached by the House of Representatives, and both were later acquitted by the Senate.
· If the United Kingdom heads to the polls while the uncertainty over its planned departure from the European Union lingers, the election outcome could backfire for the Labour party, according to one of its members of parliament.
She explained that prolonged uncertainty over the U.K.’s future has caused frustration and confusion among voters — so much so that many voters who opted to remain in the EU “now just want to get it done as well,” Hoey claimed.
· Boris Johnson’s cabinet is divided over how to proceed with Brexit, as the prime minister faces the stark choice of pressing ahead with his deal or gambling his premiership on a pre-Christmas general election.
· The United Kingdom will ultimately leave the European Union on the terms of Prime Minister Boris Johnson’s Brexit deal even though parliament has complicated the timing of the divorce, a senior Downing Street source said.
“This ends with us leaving with the PM’s deal,” the source, who spoke on condition of anonymity, said. “We will leave with a deal, with the PM’s deal.”
· Oil prices slipped on Thursday amid persistent concerns about a weak demand outlook, after posting sharp gains in the previous session following a surprise crude inventory drawdown in the United States.
Brent crude futures LCOc1 fell 17 cents, or 0.3%, to $61 a barrel by 0620 GMT. The international benchmark crude rose 2.5% on Wednesday to settle at $61.17 a barrel, levels not seen since Sept. 30.
West Texas Intermediate (WTI) crude futures CLc1 dropped 32 cents, or 0.6%, to $55.65 per barrel. U.S. crude closed 3.3% higher in the previous session.
“Oil prices are likely to remain subdued in the near term as the global economy continues to slow and risk aversion prevails,” Caroline Bain, chief commodities economist at Capital Economics said in a note.
Reference: Reuters, CNBC
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