Daily Brief

Daily Brief

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It’s a deal

Sterling soars 

The pound soared against the euro and dollar following statements from both UK Prime Minister Boris Johnson and European Commission President Jean-Claude Juncker that a Brexit deal has been agreed. Johnson described the agreement as “a great new deal”, while Juncker labelled it a “fair and balanced agreement for the EU and the UK”. 

Questioned by BBC’s political editor Laura Kuenssberg, the EU’s chief negotiator Michel Barnier said that the Northern Ireland backstop has been “removed” and “replaced with a different approach.”

The new deal will still have to pass through both the European and UK parliaments, however, while speculation that the DUP are still opposed to the deal, even in this new format, could pose another obstacle. Even so, investors are embracing the largest breakthrough since negotiations began.

Aussie jobs

Better than expected was the Australian Labour Force data. Despite a report earlier this week that entry-level jobs are hard to come by, total employment in Australia went up by 14.7k in September and unemployment fell from 5.3% to 5.2%. The Aussie dollar responded positively, despite a simultaneous report that business confidence "fell sharply" in the third quarter. 

Consumer price index data in the last 24 hours put inflation at 1.7% in Britain, 0.3% in Italy, 0.8% in the euro zone and 1.9% in Canada. Though it was the highest in absolute terms, the Canadian reading was the most disappointing relative to forecast and it send the Loonie lower. US retail sales were also a disappointment, falling 0.3% in September.

Will it fly?

Sterling's fortunes between now and Monday depend entirely on what transpires with Brexit. There is a modest supply of ecostats today but Friday is something of a statistical desert.

UK data this morning are predicted to show retail sales stagnating in September yet still increasing by 3.2% from the same month last year. Euroland has nothing to show beyond August's construction output. The United States reports on housing starts, building permits and industrial production, while the Philadelphia Fed publishes its Manufacturing Survey. Inflation data for Japan come out tonight, followed by  Chinese retail sales, industrial production and third quarter gross domestic product. There are no other data of any consequence on Friday.

But who needs economic statistics to keep them busy when they have Brexit? For the enthusiastic trader it is the gift that keeps on giving

GBP: Good day, late setback

GBP: Good day, late setback

AUD: Boosted by jobs data

AUD: Boosted by jobs data

CAD: Inflation disappoints

CAD: Inflation disappoints

USD: Retail sales fall

USD: Retail sales fall

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