Forex Today: UK PM May’s Brexit speech – Big event in Europe

Dhwani Mehta FXStreet

Risk-off sentiment extended into Asia Tuesday, and emerged the main underlying theme, as investors brace for another volatile session ahead, with plenty of risk events, with the Big one being the UK PM May’s speech, in which she may unveil her Brexit plans. Also, a massive USD slump was witnessed in Asia; with most traders unwinding their USD longs after yesterday’s rally backed by aggressive selling in the GBP/USD pair.

The European calendar ahead is expected to emerge eventful, with the UK CPI report to kick-start an action-packed session, which will be followed by ZEW economic sentiment for the Euroland and Germany. The UK PM May’s speech pointing to a ‘clean Brexit’ is scheduled around 1100GMT, and will hog the limelight today.

While in NA session, we have FOMC member Brainard and Dudley up on the rostrum alongside the US treasury Secretary Lew. The NZ GDT price index will be also closely eyed for fresh direction on the Kiwi.

Main topics in Asia

Brexit fears mounting up on more Telegraph news for May's Brexit 12 point plan delivery speech

The Telegraph put out another news today and is gearing up the markets for some hard Brexit talk from UK Prime Minister on Tuesday that the 'Media Group say will fall in as a 12 point Brexit plan.

Asian stocks extend the drop ahead of UK PM May’s speech

The Asian markets extend losses for the second straight session on Tuesday, as impending Hard-Brexit concerns continue to dampen sentiment, as investors gear up for the UK PM May’s speech due later today.

IMF: China is the new fastest-growing large economy

The International Monetary Fund (IMF) published a latest report on 2016 growth rates, noting that China is the new fastest growing large economy across the globe.

OPEC’s Sec-Gen Barkindo: Stability to the oil market will be restored this year

OPEC’s Secretary General Barkindo said in his speech on late-Monday, he forecasts that stability would return to oil markets this year.

Key focus for the day ahead

UK: CPI and PM May’s Brexit speech in focus – TDS

Research Team at TDS sees upside for CPI for December, a headline reading of 1.5% y/y (mkt 1.4%) but any market reaction to stronger inflation data should be limited, with all eyes on PM May’s Brexit speech.

UK: Hard Brexit fears returns with May’s key speech on Brexit in focus today – Danske Bank

According to the Senior Analyst, Mikael Olai Milhøj at Danske Bank, Brexit has moved back into the spotlight after a recent TV interview with PM Theresa May.

EUR/USD extends the bullish break to 1.0650, ZEW in focus

A fresh bout of USD selling across the board helped EUR/USD to extend the break above 1.06 handle, as focus remains on the upcoming macro news for further momentum.

Gold strongest since mid-Nov, eyes 100-DMA

Gold accelerates its bullish momentum into early Asia, as the traditional safe-haven asset remains in demand as we progress towards the UK PM May’s speech, which is expected to suggest a Hard-Brexit.

Kiwi to get a boost from what futures are pricing into this week's GDT price index?

The market for the Kiwi has been relatively subdued at the start of the week with much of the focus on the pound and the hard-Brexit concerns that have given way to a phase of risk aversion once again in Global markets.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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