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Stocks slide, Bitcoin at new all-time highs, Brexit uncertainty weighs on GBP

Summary:

  • European stocks follow a sell-off on indices in Asia
  • Bitcoin (BTCUSD on xStation5) is still on the rise climbing to new all-time highs
  • GBP weakens as prospects of Brexit talks remain murky and PM May faces strong opposition in her government

Global sentiment was depressed during the morning in Europe. Higher risk aversion was reflected by sell-off on equity markets and stronger JPY. When it comes to cryptocurrency markets, note that Bitcoin broke above $12,000, setting new record highs. Moving back to currencies, it’s worth stressing that GBP was under pressure as there occurred new obstacles in Brexit talks. Later today, we get BoC decision on interest rates, so CAD could be more vulnerable in the afternoon.

A stance of DUP is one of the largest sticking points in Brexit talks as the Northern Irish party opts for a Brexit scenario with the same rules for Northern Ireland and the whole Great Britain alike. On the other hand, both May and North Ireland do not want to draw a ’hard borderline’. Finally, Donald Tusk informed yesterday that he won’t back a deal where Northern Ireland opposes. Moreover, PM May is facing a strong opposition from her own party. Hence, the GBP losing more than 0.50% against USD was the weakest currency in G10 this morning.

European equities started today’s session in downbeat sentiment following a large sell-off in Asia stocks. Moods began to deteriorate on Wall Street yesterday, as no index managed to hold initial gains. Tech stocks were among top losers in Asia again. Moreover, basic resources sector also underperformed. 

Since the beginning of December Bitcoin has already gained over $2,500 being mostly fueled by expectations that a launch of Bitcoin futures by CBOE and CME thereafter could increase institutional demand for the digital currency due to higher credibility to the cryptocurrency. Just 6 days have been sufficient to see the Bitcoin price crossing a stunning $12,000 and one may assume that hasn’t been the end, however, massive pullbacks have to be taken into account as usual. 

Australian GDP came in at 0.6% qoq and 2.8% yoy in the third quarter against the forecasts at 0.7% qoq and 3% yoy respectively. While on the surface it could be a slight disappointment overall an acceleration of growth could be welcomed by the RBA. However, AUDUSD was sliding by over 0.30% this morning. 

December BoC meeting is highly anticipated despite low likelihood of a rate hike. Investors are looking for any suggestions how the bank’s monetary policy will look like in 2018, so the tone of a statement accompanying the rate decision should be important for CAD. Moreover, we’ll get the ADP report on employment change in the US private sector which is the last hint ahead of NFP release. The last but not least, DoE inventory data will be the crucial figure for the oil market. 

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