European open – Big weekend ahead for Brexit

Brexit deal gets EU27 judgement on Sunday

European stocks are expected to open relatively flat on Friday, something that may be a running theme throughout the day despite the US returning from the Thanksgiving bank holiday.

I think we can probably expect lower than normal volumes again on Friday and news flow may even be a little thin as well which won’t help. Thursday was another important day for Brexit talks, with the draft deal now agreed, it’s over to the EU27 on Sunday to sign it off before parliament gets to have its say.

While there could be complications on Sunday, over issues such as Gibraltar, I don’t expect them to get in the way of the deal being approved which leaves Theresa May with the simple job of getting it through parliament. With her deal being widely criticised by MPs across the political spectrum, be they leave voters or remainers, this is not going to be an easy job although the alternative of no deal Brexit may be enough to convince her doubters to side with her and get it over the line.

GBP/USD – British pound jumps on leaked Brexit declaration

Italy heading for EDP

The Italian situation is broadly progressing as many expected, with the European Commission rejecting its budget and recommending an excessive deficit procedure which will be discussed by finance ministers in the coming months. While the public bashing of Brussels and condemnation of Rome is unlikely to go away, the actual process will likely go a little quiet now moving attention elsewhere.

source: tradingeconomics.com

That may put more focus on the economy, with the political distractions taking a break, and we’ll get some insight into the health of the region this morning when the November PMIs for the eurozone, German and France are released. Growth in the region has slowed over the course of the year and the figures today are expected to continue that trend, although that isn’t worrying the ECB too much which has been undeterred and remains on course to end QE next month and raise rates later in 2019.

Two weeks seems a long way away as oil dips again

Oil prices are once again coming under pressure, with the usual list of reasons – high supply, Iranian waivers, weaker global demand and growth expectations – behind the decline. With two weeks to go until the OPEC+ meeting, at which an output cut may be announced to address the current supply/demand dynamics and arrest the price declines, I’m not convinced we’ll see too much more downside and feel a short-squeeze may be on the horizon.

Gold steady in holiday-thin trade

Bitcoin “hodlers” suffering in aftermath of cash hard fork

It feels like we’ve witnessed the return of bitcoin over the last couple of weeks, although not necessarily in the way that enthusiasts were hoping for. The plunge through $6,000 nine days ago has brought the cryptocurrency back to life and we’re once again seeing the kind of moves that got everyone excited this time last year. Unfortunately for the “hodlers” though, this time the double digit moves are taking place in the other direction and comes on the back of negative news, with the bitcoin cash split and the drama surrounding it being blamed for the latest selling frenzy.

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

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