Faceoff [Video]

The Day So Far…

GBP has come under pressure reversing the move higher overnight that was driven predominately by USD weakness. The move came after reports that Special Counsel Robert Mueller served the US President’s election campaign a subpoena back in mid-October, according to sources. As such, the pull back makes some sense as prospects for the Pound continue to remain uncertain while investigations into Trump and his dealings with Russia are nothing particularly new. Meanwhile,  when questioned on the timeline of settling the divorce fee with Europe, Brexit Secretary David Davis said we will have more clarity in a “few more weeks”. This continues to fit with our view that it remains unlikely that a transitional deal will be struck before the EU Summit in 4-weeks time and so Cable remains vulnerable to the downside.

Elsewhere, WTI crude has shot higher with the technical break of Wednesday afternoon’s high ($55.83), resulting in a retracement of a large portion of the sell-off seen at the start of the week. From a fundamental perspective we remain of the view that crude should be supported into the month end OPEC meeting with the Saudi’s remaining committed to further extensions to the existing deal.

The Day Ahead…

Looking ahead the economic calendar is fairly light with Canadian CPI data headlining at 1330GMT. Some attention may also be paid to the Baker Hughes rig count after last week saw a surprising jump of nine compared to a persistent trend lower seen over recent months. Otherwise the other areas I would be monitoring include any updates from the US Senate on the tax plan given the passage in the House last night and maybe more one for the weekend will be how German Chancellor Merkel gets on with her pursuit of forming a coalition given she has now passed her own self-imposed deadline and risks either running with a minority government or igniting the prospect of fresh elections.

Well at least when the Brexit movie is commissioned in years from now Nicolas Cage and John Travolta will still be getting work!