This week’s market commentary from David Jones, Chief Market Strategist at Capital.com

This week all eyes are once again back on Brexit when it comes to European markets. There are up to three votes in the UK Parliament regarding Brexit in the days ahead. Negotiations between the EU and the UK appear to be at stalemate – and this is with less than three weeks to the proposed date that the UK is meant to be leaving.  So far this year, whenever it looks like Brexit may be delayed it has provided a lift to the pound. Already there is talk that Tuesday’s meaningful vote – the one that Prime Minister Theresa May lost so heavily in January – may be postponed or at least watered down. Once more the pound has reacted positively to this and it really is a week where currency traders will be braced for plenty of volatility as the political machine rumbles slowly on, to hopefully some sort of conclusion.

Leaving Brexit to one side, it could be an interesting week for stock markets. Last week saw major markets under pressure for most of it, with US markets experiencing their longest slide so far this year. This is not saying that much though – since the lows set in December, stock markets have experienced a near vertical recovery for much of 2019, so some sort of sell-off was well overdue. This week should be interesting to see if the buyers return after this slight correction and push the major world indices out to fresh highs for the year so far.

Other markets have been somewhat quiet. The price of oil has not really moved much in the past few weeks, remaining capped by the $60 level. Of course, this is another market that has enjoyed a strong recovery since the end of 2018. Traders may be feeling that after a 30% bounce since the December lows, this is due some sort of correction – but so far at least this has not happened.  With a recovery in the US dollar in recent weeks, the gold price has also been under some pressure – sliding back below $1300.  If stock markets continued their recovery, there is the risk that this will turn investors off the safe-haven aspect of the gold price and add a little more pressure to the downside.

*This is market commentary information, therefore it shall not be regarded as investment research or investment advice. Also note that past performance is not reliable indicator for the future.”