Markets Waiting Patiently for Next Brexit News

The pound was sold in the afternoon yesterday as an unsubstantiated report surfaced in a local paper suggesting talks between the Labour party and UK Government have stalled. This saw the pound dip lower as markets price in another breakdown of the Brexit process. This report was later denied by the Labour party, however it looks like the market is taking the view that where there is smoke there is fire.

On the data front, average earnings continue to show solid growth while the unemployment rate remained unchanged at 3.9%.

The main focus for today will be the inflation numbers due out this morning and any further news on Brexit talks.

Euro

The Euro is stronger across a basket of currencies after a solid set of ZEW surveys. The current situation survey was still weak, however future expectations outstripped expectations by three-fold. The focus for the day will be the current account numbers and inflation reading.

US Dollar

The US dollar is under pressure as risk sentiment shifts on the back of good numbers from China overnight. Solid GDP, retail sales and particularly good industrial production numbers helped shift sentiment around global growth and trade. Therefore, traders have sold out of the dollar in search of riskier assets that can return more from their investment.

The trade balance number out this afternoon will be the focus for the Dollar.

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