Just a few more words on PM Theresa May before we move on to the ECB below. May might have won a pyrrhic victory in fending off a leadership challenge. That could be the same for the pound as it rose more than 120 pips on Wednesday to lead the way. Month-to-Date, silver leads all major currencies, followed by gold, CHF and EUR. The ECB decision is up next.

Theresa May easily won her leadership challenge in a 200-117 vote but it came at a cost. She promised colleagues that she wouldn't run in the next general election as leader and that she would bring back a better Brexit deal.

The problem is that she may not be able to deliver. The EU has signaled scant room for negation on the thorny Irish backstop and a vote of no-confidence in the government could bring an election any time. At the moment, the DUP says it will continue to support the Conservatives and it's unlikely that dissenting party members would want to trigger an election.

So what's next? May said she will bring a vote back to Commons before Jan 21 on the Brexit deal. If she loses that, there's likely a new impasse. Most still believe a no-deal Brexit is extremely unlikely but a deal around the current parameters is also a longshot. Delaying Article 50 is a possibility but to what ends?

Ultimately, this vote only underscored that 117 of 317 Conservative MPs don't support May and with only a narrow majority (with the DUP); there is no margin for safety.That means there is no margin for safety for GBP either. It will remain vulnerable to headlines and Brexit uncertainty.

Draghi will Like this Chart

The euro also made some gains on Wednesday amidst broad US dollar selling. It will remain in the spotlight today with the ECB decision at 12:45 London/GMT and press conference/forecasts at 13:30 London/GMT. The ECB will end QE and reinvestment details are unlikely to matter much to the euro. The ECB has the option of downgrading forecasts, tilting its risk assessment to the downside and pushing out forward guidance on no hikes through Autumn 2019 but there's a good chance Draghi punts on all three as they look for cover for ending QE and continue to hope the economy improves. If so, the headlines could boost the euro; at least in the short term.

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