Afternoon Market Update – 01/12/2016 – by Jaz Singh

December 1, 2016 by

The big news this morning comes from David Davis, the Brexit Secretary for the British government. He states that the UK would “consider” making contributions to the EU after exiting the bloc in order to retain access to the single market. Sterling has rallied 130 pips against the dollar off the back of this revelation, extending its bullish move from the 1.24 handle since Monday. Cable currently trades comfortably above 1.26 with the next upside target at 1.26750. This sterling strength has resulted in a sell off in the FTSE 100, finding some support at the 6700 handle. The dollar index is in the red as markets prepare for the NFP data tomorrow. Elsewhere we’ve had mixed PMI data from the Eurozone this morning; despite this the euro has pipped higher across the board with many suggesting that ECB tapering is on the horizon. For this reason we also see a sell off in European bourses with the DAX looking to target 10500. Crude oil has extended its gains following OPEC’s announcement of an output cut yesterday, with WTI finding double top resistance at $50.15. Looking ahead to the afternoon session we have multiple data points from the US, with the highlight being ISM Manufacturing PMI at 15:00 GMT.