EU Summit’s Brexit Headlines to Drive Sterling

The pound edged lower yesterday across the board as Retail Sales growth in Q3 slowed to a four-year low. Sales were down 0.8% from August to September. Sterling retreated to one-week lows against the euro and the dollar. The dollar gained after the Senate’s budget approval was seen as possibly paving the way for tax reform. Euro-dollar headed lower after hitting highs around 1.1850.

Previous Day's Market Highlights

The pound edged lower yesterday across the board as Retail Sales growth in Q3 slowed to a four-year low. Sales were down 0.8% from August to September. Sterling retreated to one-week lows against the euro and the dollar. The dollar gained after the Senate’s budget approval was seen as possibly paving the way for tax reform. Euro-dollar headed lower after hitting highs around 1.1850.
 
The kiwi dollar remained under pressure on news that the Labour Party had won enough support to form a government. Spain proceeded with Article 155 after Catalonia maintained its declaration of independence.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1109 1.1433 1.1069 3.18%
GBP / USD 1.3127 1.3596 1.3027 4.19%
EUR / USD 1.1816 1.2005 1.1669 2.80%
GBP/AUD 1.6716 1.7201 1.6675 3.06%
GBP / NZD 1.8769 1.8818 1.8367 2.40%
GBP / CAD 1.6411 1.6798 1.6350 2.67%

Today's Market Highlights

Sterling has picked up this morning, correcting additional overnight losses that saw it dip below 1.1100 against the euro and 1.3100 against the dollar. UK Public Sector NetBorrowing will likely have limited impact barring any surprises (09:30 BST).
 
Politics remains at the forefront of traders’ attention as the European Council meets for a second day. The agenda includes a discussion of the progress made on Brexitnegotiations. EU leaders are expected to announce today that not enough progress has been made to move on to trade negotiations, which may weigh on the pound.
 
In the afternoon, attention turns to Canada, which releases August Retail Sales and September CPI data (13:30 BST). The figures will be closely watched ahead of next week’s Bank of Canada meeting. Any gains in inflation may heighten expectations that the BoC will maintain a relatively hawkish outlook after raising interest rates at its previous two meetings.
 
Fed Chair Yellen speaks this evening after the European close on “Monetary Policy Since the Financial Crisis” (00:30 BST).   

Today's Economic Calendar

Time Currency Release Consensus Previous
24hr EUR European Council Meetings
09:30 GBP Public Sector Net Borrowing (Sep) £5.700B £5.093B
13:30 CAD Retail Sales MoM (Aug) 0.5% 0.4%
13:30 CAD Core Retail Sales MoM (Aug) 0.3% 0.2%
13:30 CAD Consumer Price Index MoM (Sep) 0.3% 0.1%
13:30 CAD Core CPI MoM (Sep) 0.3% 0.1%
13:30 CAD Core CPI YoY (Sep) 1.6% 1.4%
15:00 USD Existing Home Sales (Sep) 5.30M 5.35M
18:00 USD Fed's Mester Speaks
00:30 USD Fed Chair Yellen Speaks