“Sufficient Progress” Made in Brexit Talks

European Commission to Recommend Moving onto Phase Two of Brexit Negotiations

European equity markets are poised to open higher on Friday, buoyed by the news that the UK and the EU have come to an agreement on the three contentious issues that make up phase one of the Brexit negotiations.

After months of slow and frustrating negotiations, it has been announced this morning that sufficient progress has been made on the financial settlement, citizens’ rights and the Irish border to move onto phase two of Brexit negotiations. Jean-Claude Juncker stated this morning that the European Commission will now make this recommendation to the European Council, who will vote on this next week.

There has been numerous times when an agreement looked difficult or even unlikely before year-end which would have made achieving a trade deal by March 2019 very tough. Today is a hugely significant step forward towards exiting the EU in 2019 and while both sides will be relieved at the progress, many more tough negotiations lie ahead. But we can’t underestimate how important today is.

On a Wing and a Prayer

Buy the Rumour, Sell the Fact – Sterling Dips on Brexit Announcement

The response in the pound to the announcement may come as a surprise given just how significant today’s agreement is but it’s worth noting that this has been in the making over the last couple of weeks and it was in both sides interest to get this done today. Had the two sides failed to come to an agreement then the downside in the pound may well have been far greater. We’ve seen a rally in the pound over the last couple of weeks on the expectation of a deal being agreed so what we may be seeing is simply a case of buying the rumour and selling the fact.

OANDA fxTrade Advanced Charting Platform

Bitcoin Slides 10% as Crazy Trading Continues

After two days of extraordinary gains, Bitcoin is experiencing a rocky start to trading on Friday and is currently trading down around 10% having rebounded slightly off earlier lows. While this would typically strongly indicate how an instrument may trade over the course of the session, Bitcoin has never played by the rules and I don’t think anyone would be surprised to see this trading back in the green before the morning is out, let alone the day.

Source – Thomson Reuters Eikon

To put today’s move so far into perspective, despite being 10% lower, Bitcoin hasn’t even wiped out Thursday’s gain or come close to doing so yet. I’m not sure that traders will be particularly deterred by what’s happened this morning, although again, Bitcoin is extremely difficult to predict and doesn’t exactly move in a logical manner. I do wonder whether the launching of Bitcoin futures on Sunday is driving people to lock in profits on the expectation or fear of large short positions being accumulated.

Dollar Higher on Tax Cut Optimism Ahead of Jobs Report

US Jobs Report Eyed Later in the Session

There’s plenty of economic data being released this morning, the most notable of which will be the US jobs report this afternoon. With the Fed preparing to raise interest rates next week, traders will be monitoring the data very closely for signs of a continuing tightening of the labour market that should produce inflationary pressures further down the road.

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.