Consolidation was the name of the game for most dollar pairs as U.S. session traders were out celebrating Thanksgiving. Still, the Canadian dollar managed to score some gains despite another dip in crude oil.
- U.S. markets closed on Thanksgiving Day
- Canadian corporate profits up 3.9% in Q3 vs. earlier 1.0% gain
- Euro zone consumer confidence index fell from -3 to -4
- Japanese banks closed on market holiday today
Brexit draft deal confirmed
Following the leak of a 26-page draft declaration in the previous session, EU and U.K. officials confirmed that they are moving forward finalizing the text to be given the green light by the summit this weekend.
No. 10 told parliament:
“The British people want Brexit to be settled. They want a good deal that sets us on a course for a brighter future. The deal that will enable us to do this is now within our grasp. In these crucial 72 hours ahead, I will do everything possible to deliver it for the British people.”
The political declaration confirmed that key elements of the controversial Chequers plan on remaining in the customs union had been dropped but that they would maintain “a trading relationship on goods that is as close as possible.”
However, there are fresh concerns with Spain over the control of Gibraltar, which the country has been trying to reclaim for the past 300 years. To which Britain said “Not now, bro.”
Spanish Prime Minister Pedro Sanchez tweeted:
After my conversation with Theresa May, our positions remain far away. My Government will always defend the interests of Spain. If there are no changes, we will veto Brexit.
— Pedro Sánchez (@sanchezcastejon) November 22, 2018
Spain technically doesn’t have any power to veto the Brexit deal. However, the rest of the EU ministers might have second thoughts about backing the agreement without the support of one of the largest economies in the region.
Sources in the EU shared that demands from other governments might have to be tabled. Note that France is also pushing for access to British fishing grounds.
In any case, the next step for May is to get the stamp of approval from 27 EU governments for the final deal to be hammered out over the weekend. From there, she needs to rally enough support from a parliament vote on the deal next month. Based on their latest session, it’s not looking too good.
If you need a quick refresher on what’s going on and what’s at stake with Brexit, do check out these 5 Major Brexit-Related Updates You Need to Know.
Major Market Mover(s):
Despite a relatively quiet day in the markets, the Loonie managed to squeeze out some gains across the board. The pickup in Canada’s quarterly corporate profits likely contributed some gains, along with the BOC Financial System Review.
USD/CAD inched down from 1.3228 to 1.3188; CAD/JPY popped up from 85.39 to 85.67; EUR/CAD ticked lower to 1.5036; GBP/CAD dipped to 1.6981, and AUD/CAD is down to .9564.
Watch Out For:
- Japanese banks closed for the market holiday
- 12:30 am GMT: Japan’s flash manufacturing PMI (increase from 52.9 to 53.0 expected)