Daily Brief

Daily Brief

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Trade talks continue

USD

Impeachment investigative meetings continue this week as the “whistleblower” is expected to testify in person. Trade talks continue as the White House denies a report that the US government was considering a possible curbing of U.S. investments in China. This included the possibility of blocking all American investments in Chinese companies. A US Treasury spokesperson issued a partial denial and the statement said “the administration is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time”. 

EUR

EUR/USD was near its overnight low as German retail sales expanded 0.5% month on month in August. ECB President Mario Draghi commented earlier today that most of the risks that the Eurozone faces come from outside the region, and that the monetary stimulus from the ECB may last for quite some time. Potential tariffs by the US on European autos continue to weigh on the single currency, as well as concerns regarding Brexit

GBP

GBP/USD was also trading towards the lower end of its overnight range, as Brexit uncertainties are being considered a “slow puncture” to the UK economy. Traders are looking at a possible rate cut by the Bank of England at their next meeting. PM Boris Johnson said in an interview that he has no intentions of asking for an extension, while Irish Foreign Minister Coveney stated that the EU was ready to negotiate, but that the UK had yet to offer a serious proposal.

JPY

USD/JPY is quiet, with traders easing off safe haven business as we begin the week. Traders will keep an eye on the impeachment proceedings as well as the continuing trade talks going forward this week, while Tankan survey numbers are also due. The tankan report is a monthly survey of leading Japanese companies.

CAD

Lower oil prices are weighing on the Canadian Dollar this morning. As oil prices head towards the $55 a barrel mark, commodity-based currencies such as the “Loonie” come under some pressure. There are no important economic numbers coming out of Canada this week, so the Canadian Dollar could follow the USD this week.

CNY

Positive economic news came out of China today as their manufacturing PMIs improved. The Caixin Manufacturing PMI improved to 51.4 in September, up from 50.4 the previous month, and better than the expected 50.2. This is the highest rating since February 2018, signaling a recovery in the sector.

USD: Firmer this morning, despite continuing impeachment talks

USD: Firmer this morning, despite continuing impeachment talks

EUR: Remains under pressure despite better than expected German retail sales

EUR: Remains under pressure despite better than expected German retail sales

GBP: Brexit uncertainties continue to weigh on the GBP

GBP: Brexit uncertainties continue to weigh on the GBP

JPY: Safe haven trades lessen as markets focus on Tankan report later this week

JPY: Safe haven trades lessen as markets focus on Tankan report later this week

CAD: Loonie trades mid-range as crude oil trades below $56

CAD: Loonie trades mid-range as crude oil trades below $56

CNY: PMI numbers are better than expected

CNY: PMI numbers are better than expected

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