Here is what you need to know on Tuesday, December 17:
Fresh Brexit fears: UK press reported overnight that PM Johnson will set a new deadline to prevent any extension of the Brexit transition period beyond 2020. Hard Brexit fears resurfaced thereafter and pounded the Sterling. GBP/USD quickly eroded nearly 100-pips and fell sharply below 1.3300. Heading into Europe, Cable reverses half the slide and looks to regain 1.3300. Meanwhile, Johnson is considering a big overhaul of the House of Lords, FT reported. Focus on UK Employment data and BOE Governor Carney’s speech ahead.
Trade deal skepticism: US-China Phase One trade deal optimism faded, despite assurances from the White House that deal with China is done. The skepticism is mainly in light of Beijing's reticence in acknowledging specifics laid out by the US.
The US dollar was broadly bid, helped by the slump in GBP/USD. EUR/USD remained trapped below the 200-DMA at 1.1153. Meanwhile. USD/JPY traded modestly flat above 109.50. The Aussie was pressured to near 0.6860 region on dovish RBA’s December meeting’s minutes while the Kiwi benefited from a lift in New Zealand’s Business Confidence.
Among related markets, Asian stocks tracked the Wall Street rally while Treasury yields dropped over 1%. Gold kept its recent range around $ 1475 while both crude benchmarks traded little changed near three-month tops ahead of API weekly Crude Stocks data.
Cryptocurrencies consolidated the overnight slump, with Bitcoin licking its wounds sub-$ 6,900.
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