Here is what you need to know on Wednesday, October 23:
- Prime Minister Boris Johnson’s Brexit deal passed the first hurdle in parliament, but his expedited schedule for passing legislation in three days. The government announced it is pausing the next phases. The vote makes leaving the EU by October impossible, and Johnson will now consult the bloc’s leaders, which are likely to approve an extension until January 31, 2020, which will allow time for elections, perhaps in early December. Another option is to set a new timetable and try to push through the Brexit accord and leave earlier.
- The growing uncertainty has sent GBP/USD below 1.29. EUR/USD was also dragged lower. More Parliament approves Brexit, hedges on departure date
- The broader market mood “risk-off” due to Brexit and uncertainty about US-Sino trade talks. The world’s largest economies may fail to complete writing Phase One of the trade deal by the APEC Summit in Chile in several weeks. The Japanse yen is strengthening, and commodity currencies are on the back foot.
- Oil prices are holding onto their gains after reports suggested OPEC is considering “deep cuts” to oil production in its upcoming meeting. WTI Crude Oil is hovering around $54. On the other hand, private inventory data has shown rising stockpiles, limiting the advance. Official inventory data are eyed later on.
- Cryptocurrencies have come under fresh pressure, with Bitcoin dipping below $8,000.
- The lack of significant events leaves the stage for Brexit and trade news, as tension mounts towards Thursday’s European Central Bank decision.