Sterling, euro stocks scuttled as Brexit deal hits the rocks

Sterling tumbled and the rest of Europe's share markets groaned on Thursday after a long-awaited Brexit agreement was thrown into chaos as Britain's chief negotiator for the deal quit just hours after it had been unveiled.

Up until that point markets had looked relatively calm. Asia had cheered news that China and the United States were back in contact about their trade dispute, and oil was inching up again having halted a record losing streak.

Brexit minister Dominic Raab quit in protest at Prime Minister Theresa May's deal for leaving the European Union.

In his resignation letter he wrote "No democratic nation has ever signed up to be bound by such an extensive regime, imposed externally without any democratic control over the laws to be applied, nor the ability to decide to exit the arrangement,".

Cue a sterling meltdown. The currency slumped a full 2 cents to $1.2750 and though that made the FTSE stronger -- a weaker pound makes life easier for exporters on the index -- big UK banks the rest of Europe sank swiftly into the red.

UK government bonds saw a rush of demand with the reflex dive for cover and the sight of state owned bank RBS stocks down almost 9 percent, drove the biggest fall in 5-year yields since just after the June 2016 Brexit vote.

EU leaders had said they would meet on November 25 to endorse the divorce deal, but May now faces the much more perilous struggle of getting parliament to approve what was agreed.

In the commodity markets, where Brexit may be a sideshow but turbulence is still acute after a 12-day losing streak was set this week, the mood was much calmer.

U.S. oil futures steadied at $56.35 a barrel, after a slight bounce overnight. Brent was up 0.4 percent at $66.42.

The S&P 500 had fallen for a fifth straight day overnight too, with financial stocks hit by fears of tighter regulations once the Democratic Party takes control of the House of Representatives.

U.S. equities have also been pressured by concerns that earnings growth might be peaking, trade tensions and a slowing global economy - factors that had triggered a rout in riskier assets in October.