EncoreFX’s daily market updates are written by our experienced and professional dealing team.
Beijing Remains Silent on Tariff Truce | Brexit Could Finish with Unilateral Withdrawal
Published December 4, 2018
Oil has jumped the most since June after Russian President Putin agreed with Saudi Crown Prince Mohammed bin Salman that the two energy producers keep cooperating to manage the oil market. This comes despite cautioning that no final decision on volumes has been reached. These discussions will linger until oil ministers meet in Vienna on Dec 6 to 7.
Treasury Secretary Mnuchin and Larry Kudlow both attempted to clarify the confusion over exactly when the 90-day tariff truce would begin between the United States and China. The White House Administration corrected this discrepancy to Dec 1. Chinese bureaucrats from various government offices in Beijing are awaiting the return of President Xi Jinping prior to any official issuance of remarks on the topic.
The spread between 3-year and 5-year treasury yields finally dropped below zero yesterday. Markets have conventionally viewed the inversion of the 2-year to 10-year spread as the indication of recession. The 10-year yield dropped below its 200-day moving average for the first time this year, in the midst of markets reassessing the Federal Reserve tightening outlook.
The pound is rising on the latest advisory opinion from the European Union’s top court, which stated that the UK could unilaterally withdraw from the Brexit process. Prime Minister May now retains the possibility of pressuring Brexiteers within the Conservative party that voting down the deal may lead to no Brexit at all.