Today’s event of the day was the decision of the UK Supreme Court on the issue of commencement of the Brexit procedure. Unclear was whether Article 50 will launch the UK government or democratically elected parliament. The judges’ decision was closely watched by financial markets, although the reaction may be surprising.

On today’s judgment of the Supreme Court we have devoted a separate article. Here we will only take a look at reaction of GBP to the latest reports. In the first minutes after the announcement of the judge’s decision we observed considerable volatility of pairs associated with the British currency. For the next hour the pound began to weaken in order to reach the average of the last 55 days and to re-start growth.

Today’s decision of the Supreme Court really does not change anything in terms of whether will Brexit happen or not. The two largest parties in the British Parliament (Conservative Party and the Labour Party) have already announced that they will not vote against the result of the June referendum. Brexit is (for long) a reality, and the pound will react mainly on reports regarding shape of secession. Before noon, there was also a larger slump in the oil market – a response to reports of Oman and the country’s response to the current actions of OPEC. Government officials report that they treat the agreement to reduce oil production in the short term only. The possibility of increasing the supply to the market (target of production cuts in Oman is 970 thousand barrels per day) meant that prices quickly retreated to the area $ 55 per barrel. In the later hours this decline was almost entirely corrected:

The most important events of the day:

  •   UK Parliament decides about the future of Brexit.
  •   European PMI – employment growth at 9-year highs
  •   Bdswiss- CySEC pay EUR 150,000 under a settlement
  •   KNF warns broker GKFX
  •   Citi recommends buying USD/JPY

What awaits us in the night?

Night owls should focus during the Asian session primarily on data from Japan – there will be published trade balance for December. About 1:30 we’ll look at the Australian CPI for the fourth quarter of last year. Forecasts say the ratio of the acceleration of price increases in the Antipodes to 1.6%, which should positively affect the valuation of AUD. As usual, the nightly data will be described in tomorrow’s morning review of the market.

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