Wednesday October 9th, 2019

“The world economy is now in a synchronized slowdown” said the new MD of the International Monetary Fund (IMF). Concerns about the upcoming Sino/US Trade talk weighed on the markets yesterday as the US initiated visa limitations on Chinese officials and blacklisted of 28 Chinese firms. Sentiment rebounded slightly with reports over night that China is still open to agreeing to a partial trade deal, giving some comfort to investors. The US$ weakened vs the major currencies, Chinese Yuan hit a 1 month low and Swedish crown at 10 year lows. The Fed Chairs comments yesterday was optimistic about the US economy, but left the door open to cutting interest rates. The market will focus on the FOMC minutes in the afternoon and the Sino/US talks starting tomorrow.

C$ remains relatively sidelined vs other currencies which have been impacted negatively from the ongoing Sino/US trade dispute. Oil prices bounced slightly on reports that China was still open to a partial trade agreement. The focus remains on the Sino/US trade and the Canadian unemployment data report out on Friday.

Eur remained within its current trading range, only strengthening on US$ weakness rather than on its own merits. European growth concerns, Sino/US trade talks, Brexit and the upcoming FOMC will dominate investor focus. Intraday expect more of the same range bound trading, but the currency remains vulnerable to negative pre-trade talk comments.

GBP rallied initially on hopes of EU concessions for UK, but quickly gave up its gains after concession were rejected. Brexit negotiations continue with little sign of progress ahead of the EU Summit on Oct 17th. GBP remains volatile and vulnerable to further weakness ahead of the Brexit deadline. 22 days until the Brexit deadline.