European stocks and US futures are mixed following a soft Asian session. Wall Streets' close was lower as September retail sales were weaker than expected. Slower sales across headline and core indicate consumption spending is decelerating in 4Q. The unexpected drop in retail sales increased market pricing for an October 25bp rate cut by the Fed. Treasuries yields ticked lower due to weaker risk sentiment. Doubt over a Brexit deal between the UK and EU has placed a gloom over markets. GBP fell sharply for 1.2877 high, as a deal fail to materialize, despite hype suggesting talks were close. Talks are now in the critical 24-hour period. Traders should expect high, scary levels of rogue GBP volatility.
The last update hitting the wire is that Boris Johnsons Northern Irish allies would not support this Brexit deal. While progress is being made in Brussels (or so we hear), the Democratic Unionist Party still has issues with three main points. First, arrangements for dealing with a customs check between UK-Irish borders, Northern Irish veto power for customs checks and how to institute sales tax will be levied. Data indicated that UK headline inflation was unchanged at 1.7% but the MPC’s preferred measure for underlying service inflation jumped to 2.4% from 2.0% in August. However, the reaction was muted at the focus is clearly on Brexit. FX markets are likely to collectively hold its breath until clarity on Brexit is reached. With a deadline looming large anything can happen. Was once said about The Clash’s debut album “London Calling”, right now it is the only thing that matters.
Stay on top of the markets with Swissquote’s News & Analysis
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.