Political Concerns Weigh Ahead of Busy Data Week

Sterling has seen pressure Monday morning ahead of a busy data week on renewed political concerns over PM May's leadership.

Previous Day's Market Highlights

UK production and trade data and US Michigan Consumer Sentiment provided brief interest on Friday following a quiet data week.
 
UK data surprised to the upside across the board, with a lower-than-expected September trade deficit and an acceleration in both Manufacturing and Industrial Production. The pound saw limited gains. The dollar was softer on renewed uncertainties over the timing of tax reform and a disappointing sentiment release.
 
Sterling-dollar accelerated through 1.3200, its highest levels since 2 November. Sterling-euro held ground above 1.1300. The pound also regained key levels against the Canadian, Australian, and New Zealand dollars. Euro-dollar traded relatively sideways above 1.1600, holding around its highest levels since 3 November.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1245 1.1451 1.1083 3.21%
GBP / USD 1.3092 1.3321 1.3039 2.12%
EUR / USD 1.1640 1.1858 1.1553 2.57%
GBP/AUD 1.7097 1.7368 1.6675 3.99%
GBP / NZD 1.8903 1.9433 1.8367 5.49%
GBP / CAD 1.6619 1.7171 1.6383 4.59%

Today's Market Highlights

Sterling has come under pressure this morning on renewed political concerns, particularly over the strength and future of Prime Minister May’s leadership. The dollar gained on hawkish comments overnight by the Fed's Harker, who has called for a rate hike next month. 
 
Monday is Remembrance Day in Canada and is otherwise light on major releases. Market movement may be relatively muted during the day as a result and as traders look ahead to key releases later in the week. However, the calendar picks up pace again for the rest of the week, which means greater volatility is likely.
 
It will be a busy week for the pound, with UK CPI, employment data, and Retail Salesexpected from Tuesday. These figures, particularly inflation and wage growth, will be key for monetary policy expectations and clues as to the strength of the economy as we head ever closer towards Brexit.
 
Outside of the above figures, other releases of note include the second estimate of the Eurozone’s Q3 GDPUS and Canadian CPI, and Australian employment data. US inflation will be in sharp focus for signs that the economy remains on track for a widely expected rate hike when the Fed meets next month.
 
On Tuesday, ECB President DraghiFed Chair Yellen, and BoE Governor Carney will participate in a panel on central bank communication as part of the ECB’s “Communication challenges for policy effectiveness, accountability, and reputation” conference.

Today's Economic Calendar

Time Currency Release Consensus Previous
24hr CAD Remembrance Day
09:00 EUR ECB's Constancio Speaks
19:00 USD Monthly Budget Statement (Oct) $-58B $8B
00:30 AUD NAB's Business Confidence (Oct) 7
02:00 CNY Industrial Production YoY (Oct) 6.3% 6.6%
02:00 CNY FDI - Foreign Direct Investment YTD YoY (Oct) 1.6%