01 Nov 2017

Market Brief: Barnier comments trigger Sterling rally

Kevin Musisi

Dealing team

We left the office yesterday with Sterling firmly on the front foot after chief EU negotiator Michel Barnier said that he’s ready to speed up Brexit negotiations.

Today's data releases
  Key levels
09:30 UK Markit PMI   Support Resistance
10:00 International trade secretary Liam Fox testifies before UK parliament GBP/USD 1.3027 1.3340
13:45 US Markit PMI GBP/EUR 1.1065 1.14440
18:00 US Federal Open Market Committee  
Market overview

Barnier went on to add that within "hours or days" the EU will work with the UK to set up a new round of talks and its agenda. Sterling responded positively moving towards 1.14 and 1.33 against the Euro and dollar, where we find ourselves this morning. Talk of the UK being prepared to increase the payment towards the divorce deal may have been behind Mr Barnier’s change in stance. 

Crossing stateside, investors eagerly await President Donald Trump’s Federal Reserve chair nomination, widely believed to be current Fed member Jerome Powell. In the meantime, the central bank’s policy-setting committee are set to meet this evening with the expectation that they will keep monetary policy unchanged. The rate-setting Federal Open Market Committee (FOMC) will review U.S. growth that appears sturdy despite disruptions from a spate of devastating hurricanes. That leaves them on track to raise rates in December, even though inflation remains on the low side.

The day ahead

The start to a new month brings in a raft of data releases to really get November going. Ahead of the FOMC announcement this evening, we begin with the first of the three PMI releases with the UK manufacturing numbers expected at 9.30am. We then cross to the US with the manufacturing PMI, whilst ADP employment data will be released at 12.15pm, a precursor for Friday’s Non-farm payrolls release, before US ISM numbers at 2pm.


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