3 French hens, 2 turtle doves and a Sign off on the Treaty?


Had edged higher this morning but then fell a cent against the US Dollar in two hours as Theresa May refused to rule out a second referendum and stated ‘’we can be better off without a deal’’.

The Northern Irish DUP party threatened to withdraw their support for the Prime Minister in a confidence vote if she failed to get her Brexit deal through parliament next Tuesday, which is still struggling to get the votes required.

Brexit related uncertainty will remain the main focus for investors this week with little reaction shown to the recent uptick in manufacturing PMI this morning, jumping to 53.1 against forecasts of 51.8.

Still to come this week, construction PMI tomorrow and house prices on Friday. Bank of England Governor Carney also speaks tomorrow.


The Dollar Index fell back below 97 this morning, weighed by a firm risk-on tone after positive developments in the US – China trade dispute over the weekend. The index topped out at a two-week high last week on Wednesday at 97.54 but pulled back sharply after Federal Reserve Chair Jerome Powell struck a more dovish tone than markets had expected.

The Federal Reserve are expected to raise interest rates again this month (on the 19th) which would be the ninth hike in the last three years, having previously not raised rates been 2006 and 2015.

Looking ahead, comments from Jerome Powell will again be closely watched as he testifies before Congress on Wednesday and Thursday. On the data front we have ISM Manufacturing out this afternoon, unit labour costs and ISM non-manufacturing on Wednesday, trade figures on Thursday and Non-Farm payrolls on Friday.


Has seen modest demand this morning as investors hold out hope that Italy will find a solution to their budget dispute with the EU relatively soon. As we forecast last week, a deficit target of 1.9 – 2.0% is about to be agreed.

EUR/USD topped out at 1.1380 this morning, clawing back most of Friday’s losses after Euro Zone CPI fell short of expectations. Stronger-than-expected readings for Euro Zone PMI data will also have provided support.

Looking ahead, Euro Zone PPI is out tomorrow, service PMI and retail sales on Wednesday and GDP on Friday. ECB President Mario Draghi also speaks on Wednesday.


Is the weakest of the G10 currencies this morning, weighed by broadly positive risk sentiment after positive developments in the US – China trade dispute over the weekend. A stronger-than-expected print for Japanese manufacturing PMI overnight may have offered some support.

Data releases for the remainder of the week are sparse meanwhile although Friday’s wage data will be closely watched.


Is weaker this morning, also weighed by positive risk sentiment. Strong prints for Swiss retail sales and SVME PMI may have limited the downside however, with EUR/CHF topping out at 1.1346 this morning.

CPI figures out tomorrow are the only notable release of the week.


Rose sharply this morning, boosted by a surge in oil prices. AUD/USD peaked at 0.7393 overnight, its best level since August 9th.

The RBA meet tomorrow and are widely expected to leave the key policy rate on hold at 1.50%. Q3 GDP figures are out on Wednesday, followed by trade and retail sales on Thursday.


Has been boosted by the surge in oil prices with NZD/USD reaching highs of 0.6931, its best level since June 25th. The pair had already risen sharply last week after the RBNZ eased the loan-to-value ratio restriction.

A quiet data slate ahead with only the ANZ commodity price index due on Wednesday.


Rose sharply this morning, boosted by a surge in oil prices after Russia and Saudi Arabia pledged to extend the OPEC+ agreement.

USD/CAD fell to a fresh two-week low at 1.3160 in recent trade with Friday’s negative MoM GDP print largely forgotten.

The Bank of Canada meet on Wednesday and are widely expected to keep rates on hold while the jobs reports follows on Friday.


Fell sharply last week, weighed by weaker-than-expected domestic GDP data released on Thursday.

EUR/SEK rose to a seven-session high on Friday at 10.3495 before falling back and the pair has continued lower this morning on a firm risk on tone. The Krona will also have benefited from an uptick in Swedish manufacturing PMI.

Service PMI and industrial production figures are out on Wednesday.


EUR/NOK has dropped back below 9.7 this morning and the Krone may have derived further support from a modest uptick in Norwegian manufacturing PMI.

The Norges Bank ‘Regional Network Survey’ is out tomorrow, followed by house prices on Wednesday and manufacturing production on Friday.

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