Sterling reversed earlier gains and weakened broadly overnight after the meeting between UK Prime Minister Theresa May and European Commission President Jean Claude Juncker failed deliver agreements on Brexit. Dollar also softened mildly as boost from tax bill faded. Traders are also cautious as there are still much work to be done to reconcile the House and Senate tax bills. And there are still lots of uncertainties on what the final versions would be. Investors in other markets were also cautious. DOW jumped to record high at 24534.04, but pared back much gain to close at 24290.05, up only 0.24%. S&P 500 rose to record high at 2665.19 too, but closed down -0.11% at 2639.44. Asian markets also trade with an undertone today with Nikkei losing -0.15% at the time of writing.
No deal was made yet on Brexit negotiations
Sterling reversed earlier gains on disappointment that no deal was made between UK and EU on Brexit negotiations. It's reported that UK Prime Minister Theresa May was forced to pause the lunch meeting with European Commission President Jean Claude Juncker to answer a call from furious DUP leader Arlene Foster. May's proposal regarding Irish border is believed to have a compromise to allow Norther Ireland to retain the same rules as the Republic of Ireland critical areas. The North Ireland party was deeply worried that the deal would result in "regulatory divergence" between North Ireland and the rest of UK.
May insisted after the the meeting the progress has been made even through "a couple of issues some differences do remain which require further negotiation and consultation". And she sounded optimistic saying "We will reconvene before the end of the week and I am also confident that we will conclude this positively."
European Commission President Jean Claude Juncker said, after meeting with UK Prime Minister May, "it was not possible to reach complete agreement today" despite their "best efforts". Nonetheless, he added that "we were narrowing our positions to a huge extent". And, "I'm still confident that we can reach sufficient progress before the European Council of 15 December." Juncker emphasized that "this is not a failure, this is the start of the very last round", and, "I'm very confident that we will reach an agreement in the course of this week."
Aussie lifted by retail sales, hold gains after RBA stands pat
Australian Dollar was lifted by solid retail sales data today. Sales grew 0.5% mom in October, beating expectation of 0.3% mom. RBA left cash rate unchanged at 1.50% as widely expected. The accompanying statement revealed nothing new and Aussie maintains gain after that. In short, RBA maintained that " holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time." The central bank also maintained that GDP growth would average 3% over the new few years. Employment growth is expected continue to solid but wage growth "remains low". Inflation also remains "low" but RBA expects it to "pick up gradually as the economy strengthens. It also retained the warning that "an appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast." Also from Australia, current account deficit narrowed slightly to AUD -9.1b in Q3.
Elsewhere
China Caixin PMI services rose to 51.9 in November, up from 51.2, above expectation of 51.5. UK BRC sales monitor rose 0.6% yoy in November. Eurozone will release Q3 GDP revision, retail sales and services PMI revision today. UK will also release PMI services. Later in the day, Canada will release trade balance. US will release trade balance and ISM non-manufacturing.