There are a number of headlines relating to UK politics and the monetary policy to start the Asian session off with a focus on sterling.

Ireland’s Taoiseach Micheál Martin: Britain headed for no-deal Brexit

Speaking in an interview with inews, to be broadcast on Monday as part of the Liberal Democrats’, the Irish leader, Taoiseach Micheál Martin, was pessimistic about the chances of a trade deal between the UK and the EU.

The Irish leader said that the UK’s controversial Internal Market Bill had “eroded trust” between the two sides.

Asked if he believes a free-trade agreement is likely, he said, “I’m not that optimistic if I’m honest.”

I think progress has been slow in the talks so far, I think there is still potential for a deal, I believe a deal is the sane and sensible thing to do, and I think all of us as politicians have an obligation to those we represent – and in terms of Brexit that means the least damage possible to workers, to employers and to business and economy.

In the FT, there is a news story entitled, Tentative signs of progress as negotiations enter crucial phase, which may offer some hope for sterling bulls.

In the same vein, the BBC has published comments made by Dame Carolyn Fairbairn, the boss of the Confederation of British Industry, whereby she said it was the time for "the spirit of compromise to shine through".

BoE Tenreyro: Evidence on negative rates is encouraging

Meanwhile, in other weekend news, the Bank of England has been discussing how effective negative interest rates might be in the economic downturn and "the evidence has been encouraging", policymaker Silvana Tenreyro said on Saturday.

Reuters reported that Tenreyro also told the Sunday Telegraph that any V-shaped recovery would be interrupted by local outbreaks of the novel coronavirus that weigh on the economy, and the fact there is a very weak global outlook.

A sentence from the interview that is grabbing the headlines in the same interview is as follows:

We have been discussing our toolkit in recent months, including how effective negative rates might be in the current context...The evidence has been encouraging.

Nodding to other central banks that have already taken the plunge, such as the European Central Bank and the Bank of Japan, she adds:

There has been almost full pass-through of negative rates into lending rates in most countries. Banks adapted well - their profitability increased with negative rates largely because impairments and loss provisions have decreased with the boost to activity and the increase in asset prices.

Market implications

Pre-open prices in cable are perky, up some 0.2% in the realms of 1.2770. 

The official open is at the top of the hour, but there is an order-block in the 1.28 area with the confluence of a 38.2% Fibonacci which has so far seen a sell on rallies in attempts to recover from the 1.2670s and the May's to current market supporting trendline.

A break of which would be a significant development in sterling. 

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