• Global stocks fell after Xi offers no new China reforms
  • May has set the Parliamentary vote on her deal to the week of 14th January
  • Bloomberg’s USD Spot Index weakened with focus on tomorrow’s Fed meeting

Global equities dropped across the board amid a risk-off sentiment given concerns over global growth prospects and the US-China trade war. Reports that President Xi Jinping offered no new commitments to stimulate China’s economy (Bloomberg) weighed particularly on Asian stocks
JPY gained throughout yesterday versus the Greenback supported by safe-haven flows
In addition to the tumble in equities, WTI Crude oil dipped to a 14-month low below $49 amid concerns over global growth and fuel demand
With just over 100 days until Britain is due to leave the EU, Theresa May has said she will bring her Brexit deal back to a deeply divided Parliament for a vote on the week of 14th January, pledging to get EU assurances before she breaks the deadlock over Britain’s aim to leave the EU
Despite a number of negative headlines, GBPUSD closed higher at 1.2624 (Bloomberg)
In FX, the Bloomberg’s USD Spot Index weakened yesterday with investors looking to the Fed’s December meeting tomorrow which will reveal the monetary policy outlook for the next year
Barclays Research still forecasts a 25bp rate hike tomorrow, however “now sees the weaker external backdrop and tighter financial conditions as flattening the expected policy path”, forecasting only two rate hikes in 2019 and one further hike in 2020
Elsewhere, NZD gained against all of its G10 peers aided by an eight-month high in New Zealand’s business confidence index. In Australia, RBA minutes indicated that the committee’s overall tone was little changed from the previous month’s discussions
The RBA’s board members noted that lending conditions could tighten further and maintained their view that the next move in the cash rate would be up, not down