Brexit, Boris Johnson and the Pound are in Focus later Today

A relatively quiet day on the economic calendar leaves geopolitics in focus. Boris Johnson is set to deliver the Irish backstop alternatives to the EU…
Bob Mason
Silvanute

Earlier in the Day:

After a particularly busy start to the week, it was a quiet day on the economic calendar through the Asian session this morning.

There were no material stats to provide direction through the day, leaving the markets to respond to overnight private sector PMIs from the U.S.

Particularly weak PMIs weighed on risk sentiment through the early part of the session.

On the geopolitical front, while news of the U.S not planning to delist Chinese companies from the U.S exchanges was positive, negative sentiment lingered ahead of the resumption of U.S – China trade talks next week.

For the Majors

At the time of writing, the Japanese Yen was up by 0.06% to ¥107.68 against the U.S Dollar, with the Kiwi Dollar up by 0.10% to $0.6251.The Aussie Dollar also found early support, rising by 0.13% to $0.6713.

Market reaction to the U.S PMI numbers from Tuesday weighed on the greenback to give the majors early gains.

In the equity markets, the Nikkei was down by 0.59% and the ASX200 by 1.42%. The declines also came in response to Tuesday’s stats.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Spanish unemployment figures are due out through the early part of the session.

Barring particularly impressive numbers, there’s unlikely to be too much movement in the EUR in response to the numbers.

Outside of the numbers, expect Brexit chatter will also influence.

At the time of writing, the EUR was up by 0.05% to $1.0939.

For the Pound

It’s another relatively quiet day ahead on the data front. September’s construction PMI is due out later this morning.

Following Tuesday’s manufacturing PMI, the Pound could find much-needed support should the pace of contraction ease.

It will ultimately boil down to UK politics and Brexit, however. While economic indicators flash red, any positive chatter from the EU or the Tory Party Conference would support the Pound.

News of the British PM striking a deal with the DUP is positive as Johnson prepares to deliver his proposals to the EU. Support from the DUP is a must for any deal to get the backing of MPs.

With the EU willing to consider alternatives to the Irish backstop, the Pound could reverse its current year losses should progress be made ahead of the EU Summit…

At the time of writing, the Pound was down by 0.06% to $1.2295.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Key stats are limited September ADP nonfarm employment change figures.

On the political front, any updates on trade would have the greatest influence on the day.

The Dollar Spot Index was down by 0.03% to 99.103 at the time of writing, the downside coming in response to Tuesday’s PMIs.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats due out of Canada later today, leaving the Loonie in the hands of EIA crude oil inventories.

The Loonie was up by 0.08% at C$1.3211, against the U.S Dollar, at the time of writing.

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