· Sterling rose sharply on Monday in volatile trade after media reports said that Prime Minister Theresa May was preparing to offer an amended version of her Brexit deal to parliament in a key vote on Tuesday.
Senior pro-Brexit members of May’s Conservative Party believe she has “some kind of” Brexit deal to put to parliament, the BBC’s political editor, Laura Kuenssberg, said.
The pound leaped half a percent and hit the day’s high of $1.3150 as some investors strengthened bets that May could secure a divorce deal with the European Union before Britain’s scheduled March 29 departure from the bloc.
May’s Brexit strategy was in meltdown on Monday, just 18 days before the United Kingdom is due to leave the EU, after her failure to win last-minute concessions from the European bloc on terms related to the Irish border set the stage for another humiliating defeat in parliament.
· The dollar index, which measures the greenback against a basket of six rivals, was modestly cheaper on Monday morning, last down 0.12 percent at 97.18.
The Commerce Department reported that U.S. retail sales unexpectedly rose in January, lifted by an increase in purchases of building materials and discretionary spending, but receipts in December were much weaker than initially thought.
· The Norwegian crown climbed toward its highest levels in more than four months against its Swedish rival on Monday after strong inflation data raised expectations the central bank could increase interest rates as early as this month.
Against the dollar, the crown gained half a percent to 8.689 crowns per dollar. It rose by 0.6 percent against the euro at 9.77 crowns per euro.
The optimism over Norway's economic outlook was in contrast to the general caution over the broader European economy after the European Central Bank slashed its growth forecasts for 2019 and postponed its expectations of a first rate hike.
· U.S. government debt yields were slightly higher Monday after Federal Reserve Chairman Jerome Powell described the U.S. economy as healthy and downplayed questions that President Donald Trump could remove him from office.
The leader of the U.S. central bank said that he believes President Donald Trump cannot fire him despite any frustration the White House may have with higher borrowing costs.
At 9:07 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 2.637 percent, while the yield on the 30-year Treasury bond was also higher at 3.025 percent.
· U.S. retail sales unexpectedly rose in January, lifted by an increase in purchases of building materials and discretionary spending, but receipts in December were much weaker than initially thought.
The report from the Commerce Department on Monday is welcome news for the economy after a raft of weak December data, as well as a sharp moderation in the pace of job growth in February.
Still, the relatively strong retail sales report will probably not change expectations for sharp slowdown in economic growth in the first quarter.
Retail sales rose 0.2 percent. Data for December was revised down to show retail sales dropping 1.6 percent instead of tumbling 1.2 percent as previously reported. The drop in December was the biggest since September 2009 when the economy was emerging from recession.
Economists polled by Reuters had forecast retail sales to be unchanged in January. Sales in January increased 2.3 percent from a year ago.
The January retail sales report was delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25. February's retail sales report, which was scheduled for publication on Thursday, will be released on April 1.
Excluding automobiles, gasoline, building materials and food services, retail sales rebounded 1.1 percent in January after a downwardly revised 2.3 percent plunge in December.
· European Commission head Jean-Claude Juncker said on Monday he agreed an updated Brexit deal with British Prime Minister Theresa May to make the agreement more palatable to UK lawmakers but warned they would not get a third chance to endorse it.
· Britain and the European Union issued a joint statement on Monday that was intended to persuade British lawmakers to back a Brexit deal, notably by setting a date of end-2020 to find ways to avoid a hard border on Ireland without recourse to a “backstop” opposed by the British parliament.
· Oil prices rose 1 percent on Monday, lifted by comments from Saudi Energy Minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June.
Brent crude futures were up 83 cents, or 1.26 percent, at $66.57 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 72 cents, or 1.3 percent, to settle at $56.79 a barrel.
Reference: CNBC, Reuters
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