UK Brexit Vote Due Amid GDP Report

The US dollar extended declines for a second daily session. Economic data on the day was relatively sparse. The euro traded subdued while gold prices weakened on the day.

Germany

German industrial production figures showed a disappointing print. Industrial production fell 0.8% on the month in January 2019. This was well below the estimates of a 0.5% increase and down from December’s 0.8% expansion. Most of the declines were attributed to a slump in the automobile industry.

NY Trading Session

The NY trading session saw U.S. retail sales recovering from the decline in December. Headline retail sales increased 0.2% on the month against estimates of a flat print. Core retail sales rose 0.9%, beating estimates of a 0.4% increase. However, December’s core retail sales were revised lower to show a 2.1% decline. Meanwhile, headline retail sales for December underwent a revision to 1.6% declines.

Today’s Schedule

The economic data today kicks off with the European session starting with the UK’s GDP figures. Economists forecast that the GDP will advance 0.2% in January. The data comes following a 0.4% decline in the previous period.

Besides the GDP data, the UK’s manufacturing, industrial and construction output reports will also be released. The data is, however, likely to be overshadowed by the Brexit vote due later in the evening.

Brexit

The parliamentary vote comes a few weeks before the UK is expected to exit out of the EU. The general perception is for the UK parliament to reject the Brexit bill once again.

Overnight newswires reported that PM May managed to clinch a last-minute deal with EU’s Juncker giving renewed hopes of an brexit agreement. In a late night news conference, the British PM said:

“Today we have secured legal changes.” 

This served as her announcement of the joint deal and unilateral decision addressing the Irish backstop agreement. The GBP surged 2% on the news overnight.

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