Brextention? Cable Bides its Time

Market Drivers October 18, 2018
Aussie labor data beats
UK Retail Sales miss
Nikkei -0.80% Dax 0.24%
Oil $69/bbl
Gold $1222/oz.
Bitcoin $6700

Europe and Asia:
AUD Uemployment rate 5.0% vs. 5.3%
GBP UK Retail Sales -0.8% vs. -0.4%

North America:
USD Weekly Jobless 8:30
USD Philly Fed 8:30

The majors were better bid in Asia and early European trade with EURUSD climbing back above 1.1500 while USDJPY stalled at the 112.60 level.

Cable continued to hug the 1.3100 mark as the wrangling in Brussels persisted. PM May suggested that the transition period to Brexit could be extended by a few months in order to negotiate a deal, but so far parties appear far apart on key issues of Irish border and customs union. Read More....

Weekly Focus - Pressure on Italy is set to intensify

Market Movers ahead

In the euro area, focus will remain on the Italian budget turmoil and the ECB meeting on Thursday. We will get the first indication of Q4 GDP with the flash PMI.

In the US, the first estimate for Q3 GDP is due to be released, as well as PMI for October.

We are likely to have to wait another two months at least for a deal to be agreed on Brexit.

In the Nordics, the key event will be the Riksbank meeting, as well as projections from the Swedish Debt Office. We also have the Norges bank meeting.

Global macro and market themes

Brexit negotiations failed to reach breakthrough at EU summit. No deal within the next two months.

Harsh EU letter to the Italian government.

US sell-off took a breather amid moderate risk sentiment.