China US rapprochement boosts markets

Oil prices nudge higher
Oil prices are moving higher this morning after a dip late Thursday. The markets are still trying to assess whether Saudi Arabia’s productions cuts which have already taken place in December and January will be enough to counterbalance a potential slowdown in Chinese demand, but as long as China and the US keep an open channel for discussions about trade tariffs the market is leaning towards higher prices. This morning Brent crude gained 30 cents to $61.47 and now seems to be comfortably remaining in the $60-$62 channel.
 
Brexit: what do the Europeans say? 
While the domestic political drama about Theresa May and Brexit had everybody glued to the television what passed largely unnoticed was the European reaction to Parliament rejecting the Brexit deal that was on the table. When trying to predict what will happen next most political watchers focused on the PM’s potential next move assuming that Europe will go along with Britain’s next proposal or request. However, Europe is beginning to look distinctly fed up with Britain and is struggling to find some good will to continue Brexit negotiations. 

Earlier this week Chancellor Angela Merkel said there can’t be any renegotiations on the draft Brexit deal and this morning Germany’s Foreign Minister Heiko Maas called on member states to discuss whether Britain should be allowed to re-open discussions on the draft deal. If Europe was really to dig its heels in then a hard Brexit would become yet again more likely. 

The currency markets reflected some of that uncertainty and after a rally late Thursday the pound is again losing ground. It is down 0.37% against the dollar and 0.33% against the euro.