· U.S. government debt yields inched higher Tuesday after United Kingdom lawmakers renounced Prime Minister Theresa May’s Brexit plan and rejected the deal crafted between the U.K. leader and the European Union.
The yield on the benchmark 10-year Treasury note, which moves inversely to price, was just higher at 2.711 percent, while the yield on the 30-year Treasury bond was higher at 3.072 percent.
May lost by 230 votes after members of the U.K.’s House of Commons voted 432 to 202 to reject the deal. The Withdrawal Agreement faced criticism across the political spectrum. The rejected agreement was the only deal brokered with the EU on how Britain should exit the bloc in March of this year.
· The pound nursed losses early on Wednesday on fresh concerns about the possibility of a “no-deal” Brexit, while the dollar held steady ahead of the Federal Reserve’s policy decision.
Sterling was little changed at $1.3078 but retreated 0.7 percent overnight as lawmakers rejected a proposal to give parliament a path to prevent a potentially chaotic hard exit. Britain is due to leave the EU on March 29.
The single currency was steady at $1.1435 after brushing a two-week high of $1.1450 overnight.
The dollar index against a basket of six major currencies was little moved at 95.805 following a slip to a two-week low of 95.620 overnight after U.S. Treasury yields declined ahead of the Fed’s policy statement.
· British lawmakers on Tuesday instructed Prime Minister Theresa May to reopen a Brexit treaty with the European Union to replace a controversial Irish border arrangement - and promptly received a flat rejection from Brussels.
Two weeks after overwhelmingly rejecting May’s Brexit deal, parliament backed a proposal intended to send her back to Brussels with a stronger mandate to seek changes that were more likely to win their support.
At the same time, they rejected a proposal to give parliament a path to prevent a potentially chaotic ‘no-deal’ exit by making May ask Brussels for a delay if she cannot get a deal through parliament.
However, EU diplomats played down May’s chances of being able to present a substantially different deal to the British parliament in a decisive vote expected to take place on Feb. 13.
“May will now come back to Brussels and be rebuffed,” one diplomat said. “The House of Commons will have to vote again mid-February on plan C. And it will have to be plan A all over again, but with even more pressure of no-deal Brexit looming.”
· Japan’s retail sales rose more than expected in December as consumers increased spending on clothes and home appliances, which may ease some concern about the outlook for private consumption at a time of growing pressure on the economy.
The 1.3 percent rise in retail sales in December from a year earlier was more than the median estimate for a 0.8 percent annual increase and followed a 1.4 percent gain in November.
December’s sales boost was driven by annual spending increases of 4.1 percent on clothes and 4.4 percent on appliances, data from the Ministry of Economy, Trade and Industry showed on Wednesday.
Further strength in spending would ease policymakers’ concerns about the impact on consumption from a sales tax increase scheduled for October this year.
· Oil prices rebounded on Tuesday from steep losses in the previous session after Washington imposed sanctions on Venezuelan state-owned oil firm PDVSA in a move that may curb the country’s crude exports.
Despite the move, which comes as the U.S government looks to pile pressure on President Nicolas Maduro to step down, traders said ample global oil supply and an economic slowdown, especially in China, were keeping crude prices in check.
U.S. West Texas Intermediate crude futures ended Tuesday’s session up $1.32, or 2.5 percent, at $53.31 per barrel. WTI fell 3.2 percent in the previous session.
International Brent crude futures rose $1.29, or 2.2 percent, to $61.22 per barrel around 2:30 p.m. ET, after tumbling nearly 2 percent on Monday.
· Venezuela’s government struck back at self-declared interim president Juan Guaido on Tuesday, with the Supreme Court imposing a travel ban and freeze on his bank accounts despite a warning from Washington of “serious consequences” if it did so.
The court also said prosecutors could investigate Guaido, in apparent retaliation for sweeping U.S. sanctions on oil firm PDVSA, announced on Monday.
The Supreme Court approved a request from Venezuelan Attorney General Tarek Saab to open a preliminary investigation into Guaido based on accusations he helped foreign countries to interfere in internal matters. The court also imposed a travel ban on the 35-year-old leader and froze his bank accounts.
Reference: CNBC, Reuters
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