Sterling bounces but steadies ahead of Brexit negotiations (Video)

Today's Highlights

• Sterling bounces but steadies ahead of Brexit negotiations

• Macron win steadies Euro Further

• Federal Reserve comments awaited

 

Current Market Overview

Another week and another deranged moron killing people for some kind of pseudo-religious motive. It's been going on for thousands of years and I suspect it will continue well after we have all shuffled off this mortal coil. If they didn't have religion to focus their hate, then they'd have to invent another rationale. It's desperately sad and frustrating to think that, in their minds, there is a rational justification for these barbaric acts.

In the financial markets, Last week brought a surprise 5-3 split in the bank of England's voting on interest rates and the Pound, which had suffered over the British political situation, bounced back a little. The week ahead is short on tier one UK data, but we will get public sector borrowing data on Wednesday and then we have to wait for Friday's release of the Confederation of British Industry (CBI) industrial trends report. The Brexit negotiations are due to begin in earnest today but there may well be prevarication from the UK side as the Conservative Party wrings its hands over whether Theresa May is the right person to head up that haggling process.

For the Eurozone, this is a week light on data too. The Brexit negotiations will be centre stage – assuming they commence as scheduled – and we will see the Consumer Confidence Index, plus some other minor data. Strong gains for Emmanuel Macron's party in the French general election have shocked the old guard and we wait to see if he is as much of a reformer as his slogans suggest.

From the other side of the Atlantic, US data offers US housing market data and some preliminary Purchasing Managers Indices (PMI), but the speaker from the Federal Reserve will probably take centre stage in most traders' minds. The rather hawkish stance that the Fed adopted last week when they raised the US base rate is still being closely scrutinised to see how much substance there is behind the impression Janet Yellen gave.

Around the other side of the planet, the Reserve Bank of New Zealand (RBNZ) is unlikely to change the NZ base rate when they meet late on Wednesday (UK time) but the NZ Dollar is looking strong when all around is less stable. NZ Consumer Confidence is expected to reflect positively in the index published on Tuesday.

We will see the minutes from the last Reserve Bank of Australia (RBA) meeting this week, but that's about all the Aussie data due in the next five days.

However, Canada will publish Retail Sales and Inflation data later in the week. The forecasts are very mixed, so there is scope for volatility on Thursday and Friday for the Canadian Dollar. Trade early or protect yourself if you are risk-averse.

And sheep rustling is as old as agriculture, but I have never heard of avocado rustling before. Three perpetrators were arrested in America last week charged with the theft of $300,000 worth of the things. Apparently avocados are in big demand due to a poor harvest in California, so I would get out there and panic buy now if I were you. That's a very middle class problem isn't it?