10/ 10/ 2018

ECB Non-Monetary Policy Meeting in focus while Sterling Swings Positive Pre-Brexit

The EUR tone remains soft as focus remains on Italian fiscal policy and markets maintain pressure on Italian bonds; EU officials are concerned that Italy’s mix of high debt and slow growth is unbalanced but Italian officials will submit a formal draft plan next Monday as Rome stresses that it will not back down. The face-off may continue to weigh on EUR sentiment in the next few weeks. Sterling strengthened against the dollar and hit high versus the euro on Tuesday after Dow Jones reported that the UK and European Union were making progress in Brexit talks and divorce terms could be settled next week.

Focus of today will be around the ECB Non-Monetary Policy Meeting for Euro, GBP Manufacturing Production & Gross Domestic Product which are both key indicators of the current Inflationary level of the United Kingdom will be released today while geo-political risk remains the key area of focus.

09/ 10/ 2018

Geo-Political Risk and the Greenback Remain in Focus

Euro slipped & retraced back against the dollar yesterday due to continuous pressure on US-China trade tensions growing regardless of how good the reports are in favor of US. In the absence of US Market, the sterling performed decently against the dollar with little negative pressure on the first half of the session due to political turmoil caused in UK & Irish border concern of vote out to leave UK. While on the European out-front, EU Negotiators said on Friday an agreement with Britain was “Very Close” and European Commission President Jean-Claude Juncker said on Saturday a deal would be reached in November if not this month.

Looking ahead, for the EUR, it’s another relatively quiet day on the data front, with key stats scheduled for release limited to August trade data out of Germany. Outside of the stats, we can expect geo-political risk to remain front and centre, with Italy and the rising tensions between the U.S and China to influence.While we will expect geo-political risk to be the key driver, FOMC member Evans speaking in the afternoon could provide some direction, the recent rise in Treasury yields coming as the market begins to consider the need for a more aggressive rate path.

07/ 10/ 2018

Week Ahead | Euro & GBP bounces back against Bulls on Positive Brexit Negotiator Comments

The euro declined against the dollar on Thursday as the Non-farm Payroll report from the US came way below the expected. The Unemployment rate was also down which made the USD slip against its revel currencies Euro, Japanese Yen and Sterling. Brexit discussions strengthened by EU Chief Negotiator Barnier's comment that they are prepared to offer the UK a "super charged" free trade deal that is more inclusive than any agreement offered before. Unfortunately, this means they will be rejecting Prime Minister May's demand for frictionless trade, so the Brits may not happy with the deal, so if PM May feels that the offer falls short, Brexit negotiations could break down again.

Looking ahead, the economic calendar is relatively light this week. A major focus is on how US treasury yields are going to extend the uptrend after taking out key resistance level last week. Also, US inflation data could have a hand on the momentum of yields. In turn, strength in yields might continue to pressure global equities, which even US indices tumbled towards the end of last week. And of course, China is back from holiday and could immediate face a disastrous open in its stock markets. And, it’s uncertain how far Brexit optimism could take Sterling to.

04/ 10/ 2018

Market under Anticipation to US Non-Farm Payrolls & Hourly Earnings

Analysts believe that Pound is set to be stronger by the time Britain leaves the European Union. But regardless of this stronger outlook they will need more time to return back to its previous levels. On the other hand, Jerome Powell had large influence in the US Strength over the last week with adding to the bullish mood, Powell said on Wednesday that the central bank may raise interest rates above an estimated “neutral” setting as the “remarkably positive” U.S. economy continues to grow.

All focus will shift back today & tomorrow on Non- Farm Payrolls & Average Hourly Earnings from US which could be a significant validating point for the speech made by Jerome Powell’s Statements last week. This could be a deciding factor for future Interest Rates decisions to be made by U.S. Federal Reserve for Dec & 2019.