Markets subdued ahead of BoE speeches

Volatility likely to arise from the UK political speculation and Brexit negotiations.

Previous Day's Market Highlights

Sterling fell early Monday morning as fears grew that the Irish border issue and disagreements within the conservative party could result in a serious leadership challenge to Mrs May. This was compounded by speculation that the Democratic Unionist Party were said to have backed an amendment to make EU’s Irish backstop illegal.

The pound lost ground particularly against dollar, falling below the 1.30 level for the first time since October 4th. GBP/EUR briefly dipped below 1.13 before recovering later on in the afternoon session. Theresa May attempted to calm Brexit rebels during her testimony, insisting that the withdrawal bill was 95% settled. However, this did little to influence the value of the pound.

Ongoing Italian budget concerns and increased global risk aversion saw the greenback also take advantage of the euro, with EUR/USD dropping 0.6% to 1.1460.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1332 1.1463 1.1112 3.06%
GBP/USD 1.2995 1.3298 1.2922 2.83%
EUR/USD 1.1460 1.1815 1.1436 3.21%
GBP/AUD 1.8334 1.8735 1.7937 4.26%
GBP/NZD 1.9799 2.0481 1.9554 4.53%
GBP/CAD 1.7000 1.7286 1.6598 3.98%

Today's Market Highlights

Earlier this morning we have seen German PPI improve 0.5% on a forecast of 0.3%. In the absence of any other significant data releases today, attention today turns to the central bank speakers from either side of the pond. BoE Chief Economist, Andy Haldane, is due to speak on the topic of ‘policy experiments’ at 11.30am. This is to be followed by Governor Carney speaking on the topic of ‘Artificial Intelligence and the world economy’. Investors are unlikely to see any market volatility surrounding these events, especially as the BoE are effectively in ‘wait and see’ mode until we have further clarity on the terms of leaving the EU.

At 18.30, FOMC Member Bostic will be speaking on monetary policy and will be subject to a Q&A session which could influence the value dollar should he allude to future interest rate decisions.  

Overall, It is unlikely to be an eventful day, with volatility likely to arise from the UK political speculation and Brexit negotiations. Investors will be looking towards EUR PMI data tomorrow morning followed by the Bank of Canada monetary report and interest rate decision.

Today's Economic Calendar

Time Currency Release Consensus Previous
11:00am GBP BoE Member Haldane Speaking
4:20pm GBP BoE Governor Carney Speaking
6:30pm USD FOMC Member Bostic Speaking