Market Snapshot – Brexit Begins As Britain Delivers Article 50 Letter

Global Stocks Mixed as Brexit Begins

European stock markets are down from earlier highs and markets are struggling, with the DAX still holding on to a gain, while the FTSE 100 is now slightly in the red. Markets initially moved higher, following on from a largely positive session in Asia, where the ASX managed to extend Tuesday’s gains as a stronger than expected U.S. consumer confidence hit a 16-year high. Markets are still set for a fifth straight monthly gain, and in Europe DAX and FTSE 100 remain at high levels, but investors are cautious as the U.K. hands in the divorce papers to the EU.

EU officials had to wait 9 months, but the U.K. is finally ready to trigger Article 50 today, which will start the process to review a total of 20,833 laws and regulations that were in effect in the EU and Britain at the beginning of the year.

Oil Prices Edge Higher Ahead of EIA Report

Crude Oil futures are trading higher on Wednesday. The market is being supported by supply disruptions in Libya and the growing possibility of an extension of OPEC’s program to reduce output, trim supply and stabilize prices.

Late yesterday, the American Petroleum Institute’s inventories report showed a build, but this was in line with expectations. Today, the U.S. Energy Information Administration is scheduled to release its weekly inventories data at 1430 GMT. It is expected to show a build of 1.2 million barrels. The market could break out to the upside if the number beats expectations.

Crude oil is up 0.45% to trade at $48.58, Brent oil is up 0.54% at $51.7.

US Dollar Up on Consumer Confidence Data and Fed Speakers, Sterling Steadies

U.S consumer confidence figures hitting a 16-year high was certainly a boost for the markets, with the weaker Dollar contributing to a narrowing in the U.S goods trade deficit, but as we have seen in recent weeks, direction for the Dollar and U.S equities is now more influenced by the U.S administration than by the FED.

FOMC members have been on the more hawkish side this week, but the commentary continues to be ignored by the markets with it being too soon after the March interest rate hike to begin considering whether a 4^th rate hike is a realistic possibility.

The US Dollar index is trading at 99.81, up 0.28% with markets attention on Brexit fears.

The British Pound is trading slightly lower after Britain delivered Article 50 letter to start Brexit process. GBP/USD is trading at 1.2418, -0.23. The sterling moves higher also versus the Euro (+0.17%).

Eyes on US-Mexico Border Wall as Government May Force Funding Shutdown

Next April on the 28^th Donald Trump will demand the required funds to built the wall. There are probabilities that the democrats may not pass the budget of the next fiscal year if Trump will demand funds for the wall, especially if some republicans are not in the same trench with him.

The shutdown usually occurs when there is a conflict between the executing and legislative branch regarding the funding to create the “funding Gap”. That happened during the Obama presidency, when the republicans had the majority of the house. Then, it happened because of the Obama Care Act, and more than 2 million of the Federal employees found themselves out of work for about 16 days. This will be the biggest block in the history since the next session to discuss the new year budget will be in September.