Currency markets responded positively to the WH economic advisor Larry Kudlow’s comment say a trade deal is “getting closer”. Safe-haven currencies sold off on the comment and trade-exposed currencies strengthened modestly vs US$. The Fed Chair and his colleges sent a clear message yesterday to the markets that they are content with current levels of interest rates. As the HK protests intensify, the US senate is looking to vote on HK’s special trading status changing it from Open status to being reviewed annually. Markets will focus on US retails sales out today which could provide intraday direction to the US$.
Oil prices gained after OPEC’s forecasted higher demand for oil next year and also to the WH economic advisors comments. The C$ made modest gains vs US$ but failed to break-out of its current trading range. The markets have seen a number of positive trade comments without a deal being signed. Expect C$ to remain in its current trading range today. BOC Lane speech and US retails sales, both will be watched closely for direction.
Euro rebounded above 1.10, recovering from its recent lows. The positive trade talk comments and optimism for Brexit both helping the currency to strengthen. EU CPI came in within expectations and had minimal impact on Euro. US Retail sales will provide intraday direction.
Opinion polls are showing a wider gap for the UK Conservative party, giving hope for the ratification of PM Johnsons Brexit deal. GBP strengthened somewhat on the day, ignoring the current weak UK data and focusing solely on opinion polls. 27 days to go until the Dec12th Elections.