GBP/JPY

Of course, we’ll have to find out if yesterday’s sell off really is ‘oversold’, but the overnight rise for index futures and commodity FX appear to be corrective in nature.

More of the same with the Fed as Jerome Powell is confirmed for a second term. The yen rallied on geopolitical concerns as Russia threatened Finland over joining NATO.

With BOJ monetary policy diverging from that of the Fed and the BOE, USD/JPY and GBP/JPY have been on a tear lately.

UK inflation data kicks of the top tier economic data at 07:00 where an above-forecast print simply piles on more pressure for the BOE to raise rates.

A few words from Jerome Powell yesterday was all equity bulls needed to get a spring back in their step. But can they maintain that stride through today’s inflation data?

The risk-off tone of last week showed no signs of abating during Asian trade with money flowing into safe haven currencies JPY and CHF.

The British pound was the weakest major currency yesterday on the back of reports that there was no agreement on a customs union between Labour and Conservatives. It fell further this morning in reaction to the latest consumer inflation data.

So, the UK parliament couldn’t find a consensus on Brexit last night after MPs voted on eight different options and – lo and behold – there was majority for absolutely none of them.

Rumours are circulating that 3 Conservative lawmakers are to follow the 7 Labour MPs and defect to the Independent Group later today.

As my colleague Fawad Razaqzada noted earlier this morning, markets were relatively dull heading into the day’s marquee event, the release of UK PM Theresa May’s “Plan B” Brexit bill. Unfortunately, the “new” proposal did little to shake things up.

If the government loses the no confidence vote then an early general election will be called. But rebel Tory MPs and the DUP are both expected to come back on side and back the government, meaning Theresa May is likely to survive.

Next week’s major market risk event is most likely to be the UK parliament’s so-called “meaningful vote” on the withdrawal agreement Prime Minister Theresa May negotiated with the European Union at the back end of last year.

A week from today we will finally have the “meaningful vote,” when UK’s parliament will decide whether to approve the Brexit deal which Prime Minister Theresa May negotiated with the European Union at the back end of last year.