USD

A theme has emerged in the last week of a more conservative re-pricing of the 2019 Federal Reserve policy. Two-year USD swap rates have fallen 15 basis points from the early November highs, fuelled by a number of FOMC members noting the global economic environment shouldn’t be overlooked in policy setting, and even more blatantly, a comment from Federal Reserve Bank of Philadelphia President Patrick Harker on Friday that he wouldn’t support a December rate hike. This correction in rates, and subsequently the strength of the dollar may extend into Thursday’s Thanksgiving holiday – a speech today from the FED’s President and CEO John Williams may reinforce the above.

EUR

The euro rallied in light of a potential new budget from the French-German axis. However this week is crucial for the Italian budget, with the EU issuing sanctions from possible Wednesday. Such news on the horizon seems to be holding investors back. Looking past the potential sanctions, November PMI’s on Thursday could shed some light on how the Eurozone has been performing. Investors will be hoping for a better Q4 performance than Q3’s lacklustre activity. 

CAD

In the absence of major market moving economic releases, sentiment surrounding the Loonie will be formed around oil prices. Saudi Arabia is said to have pushed OPEC to cut output in December counter a global slowdown. Tomorrow may see more movements off the back of BOC Senior Deputy Governor Wilkins speech on monetary policy frameworks and public policy issues. 

GBP

A quiet day on the data front means focus on the pound remains fixed on PM Theresa May. There has already been several high profile resignations, as well as a number of Conservative MPs stating a lack of belief in her leadership. Whilst the threshold required to trigger the confidence vote hasn’t been reached yet , with 48 MPs required to submit letters to Sir Graham Brady, Chairman of the 1922 Committee, there are rumours the threshold could be reached as early as this Tuesday – watch this space for an announcement from Sir Brady. The pound has remained stable at the start of the week despite the continuous rumours of instability in the UK government over its draft Brexit deal over the weekend. Sterling is holding above the 1.28 mark against US Dollar and 1.1250 against the Euro. 

JPY

Bank of Japan Governor Haruhiko Kuroda warned in a speech this morning that declining profits at regional banks could destabilise financial systems and therefore harm the economy. He reiterated that the BOJ will continue with its current policy as inflation remains off its 2% target, but said the country’s economy is performing well nevertheless, with full employment and near-historic profitable businesses.