Overview- Sterling edges higher amid Brexit breakthrough
- Sentiment in stock markets improves
- Focus shifts to non-farm payrolls
Sterling climbed as investor’s fears of a no-deal Brexit subside. In early morning Friday, the UK government managed to make significant progress on Brexit negotiations with the EU. The breakthrough means Brexit talks can now move onto trade, one of the most pressing issues for the UK.
The pound is 0.03% higher against the dollar and 0.26% stronger against the euro. Traders are shunning UK government bonds, with the yield on the policy-sensitive 2-year gilt is up by 4.1 basis points.
Stock Markets
The increase in the pound hasn’t left a dent in the FTSE 100’s gains. The index has added 0.44%, supported by the broadly positive sentiment in equity markets.
Stock markets have reignited the rally which has boosted valuations to all-time highs this year. Technology stocks have reclaimed some of their losses and are now leading the gains in equity markets.
Italy’s FTSE MIB is 1.31% higher, while Spain’s IBEX 35 is 1% stronger. After losing 2.1% on Wednesday, Hong Kong’s Hang Seng has added 0.8%.
The upward momentum came as investors started to plunge bullish bets into technology stocks overnight. The tech-heavy Nasdaq 100 is 0.5% stronger, while Wall Street’s S&P 500 has added 0.23%.
Currency Markets
Investors are looking to today’s US jobs report, which are unlikely to affect expectations for a December rate hike, however the data will indicate the strength of the US economy.
The dollar is 0.27% stronger against a basket of currency pairs in the run up to the jobs report. The euro is 0.21% against its peers as investors favour the US dollar.
Safe-haven currencies are under pressure thanks to the rally in the dollar and equity markets. Japan’s yen is 0.4% weaker against the greenback, while the Swiss Franc is 0.35% lower against the dollar.
Commodity Markets
Brent oil added 0.8% after a 1.6% climb overnight. The international benchmark shed 2.6% off its value on Wednesday, its biggest one-day decline since mid-August.
Crude oil has gained 0.77% as investors find value in the commodity after it slipped drastically on Wednesday.
Gold slipped to its lowest point since July overnight, now trading at $1246.30. The precious metal dropped $16 off its value since Thursday as investors reduce bets in safe-haven assets.