Thursday October 10th, 2019

The US/Sino trade talks resume in Washington today and will dominate the markets focus. Despite mixed signals from both sides, markets appear optimistic about the trade talks. Anticipated trade talk topics include a possible currency pact for CNY, increased agricultural purchases and existing suctions against Huawei. Eur and commodity currencies strengthen on the trade talk optimism, while Yen & US$ weakened. US CPI  and initial jobless claims out this morning will be watched closely.

C$ continues to sit on the sidelines, appearing comfortable trading within its current trading band. No key Canadian out today, Friday the unemployment report will be released. We anticipate any positive outcome from the Sino/US trade discussions will help C$ rally and possibly retest mid-September levels.

EUR rallied on Sino/US trade optimism on reports of a possible currency pact, no new tariffs, and the possibility of an agreement. Eur breached its phycological level of 1.10 and extended its rally and is now focused on the ECB minutes out at 7.30 EST. Intraday US CPI and trade talk news will dominate intraday direction.

UK PM  and his Irish counterpart will meet in an attempt to salvage a Brexit deal. UK GDP released this morning was disappointing and kept GBP close to its 1 month low vs EUR. Key Brexit dates Queens Speech Oct14th, EU summit Oct 17-18th, emergency debate UK parliament Oct 19th, Brexit deadline Oct 31st. 21 days to Brexit deadline.