By Clare MacCarthy

A breakthrough in the Brexit negotiations was finally made in the early hours of this morning as Theresa May's government conceded territory on  three core issues – citizens's rights, financial settlement and the Irish border – and the EU 27, including Ireland, in return agreed to allow the divorce process proceed to its next stage – trade. But the devil is in the detail and May's pledge to maintain the integrity of the single market while staying outside both it and the customs union must still be worked out in practical terms.

As expected, sterling has rallied on the news, but the rally was of the timid sort: "It is a key step towards Brexit actually happening but the GBP rally is really a bit tentative, I would have expected more enthusiasm," says John J Hardy, Saxo's head of FX strategy. The caution appears to be in recognition of the fact that if this stage of talks was difficult, the next stage will be even more arduous, a fact highlighted by EU Donald Tusk in Brussels earlier this morning.

Elsewhere in FX, the US dollar continues to stand tall, Hardy reports while the euro is still wobbling, a trend that may likely be intensified by this afternoon's US jobs report.

This nonfarm payrolls survey is also important to equities, says Peter Garnry, head of equity strategy, who believes equities would get additional strength if we see an uptick in hourly earnings that would provide optimism on the inflation front.

Finally today, commodities are in a bad place: "The Bloomberg Commodity Index is back down to where it was a year ago," says Ole Hansen, head of commodity strategy, adding that heavy selling across the sector has triggered the worst weekly performance since March. Among individual commodities, natural gas is being bogged down by mild weather, silver and gold are being hurt by dollar strength and reduced geopolitical risks while oil is sloshing around as the market focus has switched from Opec cuts to US stocks and the number of productive rigs.