Good morning,

GBP: Close, yet so far

Despite Spain’s apparent concerns over Gibraltar and the knock-on effect it posed to some of the EU votes, the European Council has formally agreed to the Brexit withdrawal deal. It was made very clear that this bespoke deal was the best they had to offer for both sides, and stood no chance of being renegotiated down the line. Theresa May will now need to turn to business leaders, influencers, and most importantly her fellow politicians to ensure parliament backs the deal.

Given the thin trading conditions on Sunday evening, and the lack of GBP movements, it’s safe to say that the market had priced in the weekend result. However, risk will continue to dominate the markets as Theresa May tours the country, looking to support ahead of the December¬† Commons vote.

There is no doubt that the UK remains in a very fragile position. With no chance of renegotiating in Brussels, a failed Commons vote will most likely lead to a political meltdown and a no-deal Brexit.

The Telegraph reports that the vote could take place around 10th-11th December.

EUR: Italy continues to cook up risk

Italy keeps re-confirming that their voters expect them to deliver on their election promises, which leads me to believe that they won’t.

Matteo Salvini, the deputy Prime Minister, suggests there is some “wriggle room” in the deficit and budget targets. It remains difficult to see them delivering on promises made to the electorate whilst also seeing the deficit falling dramatically to align with the European Commission framework.

There are several ECB speakers hitting the stage today, led by Mario Draghi at 14:00 GMT, who will speak to the Committee for Economic and Monetary Affairs. As always, the focus will be on rhetorical changes to economic growth plans.

USD: Quietly ticking along

The USD has continued to build slowly off the back of Thanksgiving. There is no significant data out today but we expect the upcoming meeting between Trump and Xi Jinping to dominate the risk sentiment. Could an end to the trade war be in sight?

Have a great day.