Talking Points:
- Pound soars as UK PM May agrees Parliament to approve Brexit plan
- “Hard Brexit” risk moderating as majority of MPs seen as EU-friendly
- US Dollar may rise as FOMC meeting minutes boost rate hike outlook
The British Pound soared amid ebbing “hard” Brexit fears following reports that UK Prime Minister Theresa May accepted that Parliament will vote on her plan for the separation from the European Union. More than half of MPs are seen as relatively pro-EU and their involvement may mean that a harsh rupture that shuts the UK out of the UK single market will be avoided. Fears of such an outcome emerged after the Conservative Party Conference last week.
Looking ahead, a relatively quiet economic calendar in European trading hours is likely to put the spotlight on the release of minutes from September’s FOMC policy meeting. Officials said the case for a rate hike has increased and hinted that tightening could commence if economic conditions remain unchanged from their present path. A hawkish document bolstering conviction in the proximity of stimulus withdrawal is likely to broadly boost the US Dollar. The greenback retraced overnight following yesterday’s rally.
Where are financial markets heading in the fourth quarter? See our forecast and find out!
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 23:30 | AUD | Westpac Consumer Conf Index (OCT) | 102.4 | - | 101.4 |
| 23:30 | AUD | Westpac Consumer Conf SA (MoM) (OCT) | 1.1% | - | 0.3% |
| 23:50 | JPY | Machine Orders (MoM) (AUG) | -2.2% | -4.7% | 4.9% |
| 23:50 | JPY | Machine Orders (YoY) (AUG) | 11.6% | 7.9% | 5.2% |
| 00:30 | AUD | Credit Card Purchases (AUG) | - | A$23.6b | |
| 00:30 | AUD | Credit Card Balances (AUG) | - | A$51.3b | |
| 01:30 | JPY | BOJ’s Harada Gives Speech in Matsumoto | - | - |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT | |
|---|---|---|---|---|---|---|
| 06:00 | EUR | German Wholesale Price Index (MoM) (SEP) | - | -0.7% | Low | |
| 06:00 | EUR | German Wholesale Price Index (YoY) (SEP) | - | -1.2% | Low | |
| 06:00 | JPY | Machine Tool Orders (YoY) (SEP P) | - | -8.4% | Low | |
| 07:30 | CHF | SNB's Zurbruegg Speaks in Zurich | - | - | Low | |
| 09:00 | EUR | Eurozone Industrial Production (MoM) (AUG) | 1.5% | -1.1% | Medium | |
| 09:00 | EUR | Eurozone Industrial Production (YoY) (AUG) | 1.5% | -0.5% | Medium | |
| 09:00 | CHF | Credit Suisse ZEW Survey Expectations (OCT) | - | 2.7 | Medium | |
| 09:00 | GBP | BOE’s Cunliffe Speaks in Parliament | - | - | Medium |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.0896 | 1.0989 | 1.1021 | 1.1082 | 1.1114 | 1.1175 | 1.1268 |
| GBP/USD | 1.1624 | 1.1910 | 1.2017 | 1.2196 | 1.2303 | 1.2482 | 1.2768 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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