Brexit extension causes GBP surge
- What happens when you get the COVID-19 vaccine?
- German Health Ministry spokesperson: 11 million doses of vaccine available
- Brexit: Von der Leyen, 'We want a level playing field'
- ECB's Panetta says inflation will remain subdued
- Mid morning: GBP leads the pack against the USD
- GBPUSD pushing above 1.3400 and key trend line
- Brexit: Barnier: Talks on level playing field were hard, but...
- Eurozone October industrial production +2.1% vs +2.0% m/m expected
- Brexit: Barnier to give talks every chance of success
- NZDUSD supported higher on positive risk mood
- Platinum is sitting on weekly resistance. Buyers to step in?
- SNB total sight deposits w.e. 11 December 704.9 CHF vs CHF 705.3 bn prior
- Brexit: Irish PM hopeful of a deal
- European equities up at the cash open
- Brexit: Barnier speaks to envoys
- Brexit: EU's Barnier: Two conditions remain unresolved
- US lawmakers set to unveil two part relief plan
- Dollar weakness ahead - A trade plan to consider.
- German economy minister says coronavirus is out of control
- Gold eyes Fed on Wednesday
Other markets
- FTSE +0.48%
- Euro Stoxx +1.22%
- Dax +1.24%
- CAC %+1.16
- Gold -0.68%
- US oil +1.01%
- US 10 year yields +1.64
The session started with a mild positive risk on bias with equity futures trading higher and the Asia Pac session broadly higher. This positive sentiment remained throughout the session and the US cash open is heading for a positive start. The diplomatic shift in EU/UK Brexit negotiations saw the GBP being the leader of the pack against the USD as optimism is the flavour of the day for Brexit to start the week. However, expect more twists and turns in Brexit negotiations despite the extension in talks. Hopes of progress on the US stimulus bill also helped lift sentiment. There have been a flurry of Brexit headlines during the session not all of which have been worth reporting due to the intense focus on Brexit negotiations. One key area to watch is if we see any progress on State Aid. A win here, will probably seal the deal and help fisheries over the line too. News of a vaccine rollout in the US to cover around 1/3 of the population also boosted travel stock and sentiment.
In terms of economic data it was light with Swiss sight deposits and Euro Industrial Production. Swiss sight deposits were marginally lower, but nothing of note. Industrial production for the eurozone was firmer than expected and with some firmer revisions. However, with Germany's COVID-19 cases rising out of control it will be a battle to avoid another dip in Q1 2021.
One key theme to watch all this week and into year end is USD weakness on a Fed with potential to ease further on Wednesday. Don't miss the USD selling post which outlines a possible approach and explains the typical USD weakness into year end. See here.
All in all a subdued start to the week with GBP being the main star of the session as it led gains against a weaker USD. Expect GBP buyers on pullbacks as long as this optimism remains. However, don't be surprised if we get more headlines shifting the GBP again, so buyers be warned.
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