Tuesday May 28th, 2019

US$ safe haven buying continues with lingering trade tensions and political concerns in the EU and UK remain. The European session was dominated by the Italy’s budget and the prospect of EU commission fines. In the UK, a no-deal Brexit appearing possible as the search for a successor to PM May continues and GBP sits at 4 month lows.

 

Stronger oil prices and USMCA moving closer to ratification failed to break C$ out of its current range. The market is focused on BOC this week, but expectations are that rates will remain unchanged.

 

Eur holding just above its 2 year lows as the market awaits the EU commissions reaction to the Italian budget. Expect to see Euro to continue under pressure with the bias to be long US$.

 

In the UK, rising consensus is that Boris Johnson is the front runner for as PM and its suggested he could leave with a “No-Deal” Brexit. Expect GBP at 4 month lows will remain volatile and under pressure.