UK Refusal EU Irish Border offer and Eyes on UK Retails sales & SNB

Daily Update - 20th September 2018

Yesterday’s Focus

• JPY Bank of Japan Monetary Policy Statement, Bank of Japan Interest Rate Decision
• GBP Consumer Price Index, Producer Price Index
• EUR ECB President Draghi’s Speech

Yesterday’s Explained

The EUR/USD pair seesaw between gains and losses, stalling its intraday advance at 1.1714, despite broad dollar's weakness led the first half of the day. Risk aversion, triggered by Brexit headlines, gave a lift to the greenback ahead of the US opening, but market players are not yet willing to go long there. The pair seems to be waiting for a strong catalyst to determine direction, but there's nothing around that could be so. China and the US tit-for-tat tariffs are already priced in and given Wall Street's latest behavior, speculative interest seems not too concerned. Brexit could be a terrible burden for the UK, but the market doesn't register the potential effects it could have on the EU. Meanwhile, the short-term picture is neutral, with the price still holding above all of its moving averages, which have recently turned flat, reflecting the lack of directional strength.

The GBP/USD pair was on a wild ride this Wednesday, soaring with inflation and plummeting with Brexit headlines. UK yearly inflation jumped to a 6-month high.
According to a UK Government source, they can't accept Northern Ireland being separated off from the UK customs territory. Later in the day, EU Tusk hit the wires, reporting that Brexit talks are entering the final phase but also confirming that the Irish border problem remains unsolved.  Despite the bad news, Tusk added that there are more hopes, but less and less time to reach an agreement.

Today’s Market

• EU Leaders Summit
• USD Jobless Claims 

Today's Focus

The UK is scheduled to release August Retail Sales this Thursday. EU leaders will have a summit this Thursday and will release September Consumer Confidence, while in the US, the calendar will offer Jobless Claims Data. The Counting Jobless Claims released by the US Department of Labor measure the number of individuals who are unemployed and are currently receiving unemployment benefits. It presents the strength in the labor market. The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market.