Morning Report: 20 November 2017

November 20, 2017

GBP Sterling trended up against the US dollar last week, and has opened this week in a similar fashion, while also performing well against the euro. The weekend’s political developments have seen the prospect of an increased offer for “divorce” payments to the European Union become likely, as Theresa May seeks to break a deadlock in negotiations. Such a breakthrough would likely prove sterling positive. No headline data will be released today, But the Bank of England’s David Ramsden will speak at 18:30. Later in the week, the Autumn Budget will be released on Wednesday.

EUR It’s been some time since the euro has felt the effects of political turmoil, but over the weekend the single currency sold off slightly as German coalition talks collapsed. The centrist Free Democrats party pulled out of negotiations, saying that it was better not to govern, than govern badly, raising the prospect of another election. One of the core differences between potential coalition partners was refugee policy, with several key parties other than Angela Merkel’s CDU wishing to take a harder line on the issue. This morning’s data has included a firm print for the German Producer Price Index, and European Central Bank President Mario Draghi will testify to European lawmakers today at 14:00 BST.

USD The dollar came under pressure last week on the whole, but given the euro’s political turmoil over the weekend the greenback seems to have an opportunity to reverse last week’s losses on EURUSD. No headline data will be released today, but the week will see some very dollar-relevant events beginning Tuesday with a panel discussion featuring Janet Yellen and former Bank of England Governor Mervyn King. Wednesday is also a red letter day with Durable Goods Orders released ahead of the latest meeting minutes from the rate-setting Federal Open Market Committee.

CAD The loonie came under a brief burst of pressure on Friday, before finding its legs by the end of the session to trade broadly unchanged. Canada’s Consumer Price Index measures printed broadly on expectations on Friday, with headline CPI rising 0.1% in October. This will be a somewhat uneventful week for the loonie, although Wholesale Sales will be released on Tuesday, followed by Retail Sales on Thursday.