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The ECJ’s Advocate General released an advisory opinion stating that the U.K. can unilaterally reverse Brexit, which caused the pound to skyrocket while pulling the euro along.

The euro wasn’t the second top-performing currency of the session, however, since that honor goes to the safe-haven yen, likely because the yen got a boost from the slide in bond yields and risk-off vibes in Europe.

And while the Greenback continued to broadly weaken because of the fall in U.S. bond yields and fears of a potential recession in the U.S., the Kiwi was apparently a wee bit weaker, likely because of the risk-off vibes.

  • French government balance: -€87.0B vs. -€87/1B previous
  • Spanish unemployment change: -1.8K vs. 34.2K expected, 52.2K previous
  • Swiss CPI m/m: -0.3% vs. -0.1% expected, 0.2% previous
  • U.K. construction PMI: 53.4 vs. 52.5 expected, 53.2 previous=
  • Euro Zone PPI m/m: 0.8% vs. 0.5% expected, 0.6% previous

Major Events/Reports:

ECJ’s advisory opinion on reversing Brexit

Manuel Campos Sánchez-Bordona, Advocate General of the European Court of Justice (ECJ), released on advisory opinion at the start of the session.

And the document stated that (emphasis mine):

[T]he Advocate General proposes that the Court of Justice should, in its future judgment, declare that Article 50 TEU allows the unilateral revocation of the notification of the intention to withdraw from the EU, until such time as the withdrawal agreement is formally concluded, provided that the revocation has been decided upon in accordance with the Member State’s constitutional requirements, is formally notified to the European Council and does not involve an abusive practice.”

The Advocate General rejects the contention that Article 50 TEU only allows the possibility, put forward by the Commission and the Council, of a revocation following a unanimous decision of the European Council. In his opinion, a revocation by mutual consent of the departing Member State which changes its position and the EU institutions with which it is negotiating its withdrawal is possible. However, this would not prejudice unilateral revocation, which the departing Member State always maintains under Article 50 TEU.”

In other words, the U.K. can reverse Brexit without the consent of the other E.U. Member States, which is obviously good news for the anti-Brexit crowd.

However, it’s worth highlighting that the document is only an advisory opinion, not a binding decision.

U.K. construction PMI

Like yesterday’s manufacturing PMI report, the U.K.’s November construction PMI report was also better-than-expected since it showed that the headline PMI reading improved from 53.2 to 53.4 instead of dropping to 52.5.

And according to Markit, all three construction categories reported stronger activity, with residential building construction leading the way.

And that’s not the only good news since Markit also found that “The latest increase in staffing levels was the fastest since December 2015.”

Moreover, the “overall rate of input price inflation was the fastest since June.” And one of the drivers for the stronger input costs was “rising staff salaries.”

But on a slightly downbeat note, Markit also noted that “Anecdotal evidence suggested that Brexit-related concerns remained the main factor weighing on business optimism during November.”

Risk aversion strikes back

There were already signs of returning risk aversion yesterday. And today, risk aversion made a comeback since almost all of the major European equity indices were drowning in a sea of red.

And market analysts say that risk aversion returned supposedly because the market was beginning to doubt that the trade war truce between the U.S. and China will lead to a peace treaty or a new trade deal.

  • The pan-European FTSEurofirst 300 was down by 0.53% to 1,417.07
  • Germany’s DAX was down by 0.70% to 11,385.09
  • The blue-chip Euro Stoxx 50 was down by 0.56% to 3,196.85

Major Market Mover(s):


The pound found buyers early on and the apparent catalyst was the advisory opinion from the ECJ’s General Advocate, so hopes for reversing Brexit seems to have driven demand for the pound. Other market analysts were saying the same thing.

GBP/USD was up by 71 pips (+0.56%) to 1.2809, GBP/JPY was up by 38 pips (+0.27%) to 144.46, GBP/NZD was up by 102 pips (+0.57%) to 1.8410


The Greenback extended its losses during the session, but the Greenback managed to score a win against the Kiwi, which makes the Kiwi the worst-performing of the morning London session.

The Kiwi actually won out against the Greenback at first, but the risk-off vibes in Europe probably weighed down on the Kiwi, since selling pressure eventually won out, allowing the Greenback to (barely) score a win against the Kiwi.

NZD/USD was down by 2 pips (-0.03%) to 0.6955, NZD/JPY was down by 22 pips (-0.29%) to 78.46, NZD/CHF was down by 8 pips (-0.12%) to 0.6920

Watch Out For:

  • 1:30 pm GMT: Canada’s labor productivity (0.4% expected vs. 0.7% previous)
  • 3:00 pm GMT: New York Fed President John Williams will give a presser
  • 6:00 pm GMT: BOE MPC Member Gertjan Vlieghe will give a speech
  • 9:30 pm GMT: AIG’s Australian services index (51.1 previous)
  • Dairy auction currently underway (-3.5% previous); auction usually ends at around 2:00 pm GMT