Theresa May and Brussels Put the GBP in the Spotlight, Again.

While the U.S markets are closed for Thanksgiving, we can expect plenty of action in Europe, with Brexit and Italy still in focus.
Bob Mason

Earlier in the Day:

Economic data released through the Asian session this morning was limited to October inflation figures out of Japan ahead of Friday’s public holiday.

For the Japanese Yen, the annual rate of core inflation came in at 1% in October, which was in line with forecasts and September numbers.

  • Contributing to the 1% rise was a 4.4% rise in fuel, light and water charges, with transportation & communication (+1.9%), culture & recreation (+1.4%), medical care (+1.1%) also seeing prices rise over the year.
  • Dragging on core consumer prices was a 1% fall in prices for furniture & household utensils and a 0.2% fall in prices for housing.
  • Month-on-month, core consumer prices rose by 0.2%, with consumer prices also rising by 0.2% after a flat September, food prices stagnating in October, alongside housing and education, while prices were on the rise for furniture & household utensils (+1%), culture & recreation (+0.9%), fuel, light & water charges (+0.8%), with prices for clothing & footwear and transportation & communication both seeing 0.5% rises in prices.

The Japanese Yen moved from ¥113.061 to ¥113.05 against the U.S Dollar upon release of the figures, before rising to ¥112.98 at the time of writing, a gain of 0.07% for the session.

Elsewhere, the Aussie Dollar was gave up early gains, down 0.17% to $0.7251, with the Kiwi Dollar down 0.25% to $0.6817, the pair struggling in spite of a softer U.S Dollar, with falling commodity prices and the respective central banks’ lack of interest to shift on policy also weighing.

The Asian equity markets, the ASX200 found some much needed support, up 0.54% at the time of writing, while the CSI300 reversed the week’s gains, down 0.39%. The Hang Seng and Nikkei were flat, with the rise in the European equity markets and NASDAQ and S&P500 providing little support.

The Day Ahead:

For the EUR, economic data scheduled for release is limited to prelim October consumer confidence numbers out of the Eurozone, with the ECB’s monetary policy meeting minutes scheduled for release ahead of the consumer confidence numbers to be the key driver later in the day.

Outside of the numbers, we can expect the EUR to continue to respond to the EU Commission’s decision on the Italian coalition government’s budget and chatter from Italy in response, the EU now expected to decide on punitive measures, with Thanksgiving in the U.S expected to see lighter volumes.

At the time of writing, the EUR was up 0.13% to $1.1399, with ECB minutes and Italy the key drivers through the day.

For the Pound, it’s another quiet day on the data front, which will leave the Pound in the hands of Brexit chatter through the day, Theresa May’s progress on Brexit critical to avoiding more backlash in Parliament ahead of the EU Summit.

The British PM’s visit to Brussels ahead of Sunday’s EU Summit will garner plenty of attention, the finer details needing to be resolved to allow member states to vote on the details ahead of a ratification by parliament.

At the time of writing, the Pound was up 0.05% at $1.2784, with Brexit news the key driver through the day.

Across the Pond, there are no material stats scheduled for release, with the U.S markets closed for Thanksgiving.

At the time of writing, the Dollar Spot Index was up 0.09% to 96.626, geo-political risk and economic data the key drivers on what is anticipated to be particularly light trading volumes.

For the Loonie, there are no material stats scheduled for release ahead of tomorrow’s inflation and retail sales figures, some positioning expected ahead of the stats, though we can expect volumes to be on the lighter side to leave the Loonie more sensitive to any major moves in crude oil prices.

The Loonie was up 0.01% to C$1.3230 against the U.S Dollar at the time of writing.

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