The markets continued to focus on Brexit which dominated the headlines for a second consecutive day. No less than 24 hours after the UK Parliament rejected the Brexit bill, the opposition party leader Jeremy Corbyn moved for a no-confidence motion against the government.
This led to the no-confidence vote to happen later in the day. The result was that Theresa May won the vote of no-confidence. This puts Brexit back into the headlines as the negotiations with the EU continue.
Earlier in the day, the Bank of England governor, Mark Carney gave his testimony to the UK parliament. He said that the UK banks have enough capital to face with any extreme outcomes. Carney was confident that the recent surge in the GBP showed that a no-Brexit deal is not in sight.
The UK’s inflation data showed that headline consumer prices rose just 2.1% in December on an annualized basis. This was a slower pace of increase in consumer prices following November’s print of 2.3%.
The core inflation rate was however slightly higher, rising from November’s 1.8% to 1.9% in December on the year.
Data from the U.S. showed that import prices fell by 1.0% compared to the forecasts of a 1.3% decline.
The markets today start off with the Eurozone’s final inflation report for December. According to the preliminary flash estimates, Eurozone’s consumer prices were seen rising 1.9% on the year in December while core inflation was seen at 1.0%. This would mark a slowdown in the pace of inflation increase and comes as the ECB is starting to tighten monetary policy.
The NY trading session will see the Philly Fed manufacturing index data coming out. The index should increase to 10.1, up from 94 previously.
