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Subdued markets flicker briefly as Brexit bill is passed by UK parliament

By Hugh Wilson

Small boost for sterling but currency remains in hard Brexit trough as traders look to Christmas break

Boris Johnson’s Brexit bill passed the UK parliament without a hitch on Friday and the sleepy pre-Christmas markets flickered briefly in response.

The FTSE 100 hit 7,582.48 by end of trading, up 0.11 per cent on the day. The German Dax was also up – by 0.81 per cent – as Europe heaved a collective sigh of relief that at least one Brexit hurdle had been safely overcome.

But the movements were small and the volume of trading low, reflecting both the pre-Christmas lull and the fact that, with the UK Prime Minister having secured a healthy majority in last week's general election, the bill’s safe passage had largely been priced in by investors.

The pound rallied a little with the news, with sterling up against the dollar (0.28 per cent), euro (0.55 per cent) and Japanese yen (0.27 per cent) by 3pm on Friday.

But that rise came from a very low base, with sterling down by more than 2 per cent against every one of its most traded counterparts for the week as a whole.

Before its modest rally the currency was close to its biggest weekly loss since 2017. Momentum gained by the larger-than-expected Conservative election majority was quickly reversed by the inclusion of a hard Brexit deadline in the bill that has now passed through Parliament, making a no-deal departure more likely.

Elsewhere, US indices opened at record highs and were comfortably in the green by 10.30am EST. At that point the Dow Jones was up by 71 points and 0.25 per cent, while the Nasdaq had risen 21 points and 0.24 per cent.

US shares were still on a trade-war deal high, although oil – another likely beneficiary of better US-China relations – dipped from near three-month peaks. Brent Crude futures were down 0.42 per cent in thin trading by mid afternoon GMT, and NYMEX Crude down 1.36 per cent. Investors may have been digesting a trading update from energy major Shell hinting at slowing demand.

In keeping with the pre-Christmas lethargy, Bitcoin remained largely flat, down just 0.08 per cent at 15.45 GMT.

FURTHER READING: Investors take stock with Christmas looming

FURTHER READING: UK Parliament prepares to pass Brexit bill

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