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Just when it seemed the pound was in for a rough ride from developments in the earlier session, it got a strong boost when Barnier seemed to extend the deadline for a Brexit deal.

  • U.S. consumer credit grew from $8.5B to $16.6B vs. $14.5B forecast
  • EU chief Brexit negotiator Barnier: Deal within 6-8 weeks is “realistic”
  • EU special summit on Brexit set for November 13?
  • FOMC voting member Bostic: Inflation could pick up on higher tariffs
  • Bostic: Trade dispute causing uncertainty, pause in business investment
  • White House open to another meeting between Trump and North Korea

Major Events/Reports:

Brexit deal deadline extended?

With Brexit talks still ongoing and the deal deadline fast-approaching, it’s no surprise that pound traders are paying extra close attention to comments from top negotiators.

EU chief negotiator Barnier already spurred a pound rally a few days back when he floated the idea of a customized Brexit deal. This time, he signaled that the bloc might be willing to wait a little longer for an agreement to be hammered out.

In a business forum in Slovenia, Barnier mentioned:

“I think that if we are realistic we are able to reach an agreement on the first stage of this negotiation which is the Brexit treaty within six or eight weeks.”

Recall that many are seeing the October EU Summit as the deadline for an agreement, which means that the U.K. risks a “no deal” Brexit if they don’t come to terms with the EU by then. His remarks suggest that they’re giving PM May a bit more leeway until the second week of November.

Barnier explained that this timeline takes into account the period for ratification from both the U.K. House of Commons and European parliament. Word through the grapevine is that the EU is mulling a special Brexit Summit on November 13 as well.

Stocks mixed, commodities down

The lack of any other economic catalysts during the session left markets ending on a mixed note, although there were some signs of risk-taking.

  • Dow 30 index is down 59.47 points to 25,857.07 (-0.23%)
  • S&P 500 index is up 5.45 points to 2,877.13 (+0.19%)
  • Nasdaq is up 21.62 points to 7,924.16 (+0.17%)

Gold and crude oil, on the other hand, closed the session in the red.

  • The precious metal dipped to $1,195.01 per troy ounce (-0.08%)
  • WTI crude oil fell to $67.52 per barrel (-0.35%)

Major Market Mover(s):

GBP

Pound bulls charged when Barnier’s remarks once again reflected more flexibility from the EU in coming up with a Brexit deal.

GBP/USD jumped from 1.2933 to a high of 1.3052, GBP/JPY rallied from 143.75 to a high of 145.03, EUR/GBP dropped from .8952 to a low of .8895, and GBP/AUD climbed past the 1.8300 mark.

CHF

The Swiss franc returned some of its earlier gains, possibly as traders moved their funds to other European assets. A bit of risk appetite and profit-taking also came in play.

USD/CHF pulled up from .9733 to a high of .9755, EUR/CHF advanced from 1.1268 to a high of 1.1315, GBP/CHF bounced off 1.2599 to a high of 1.2706, and CHF/JPY retreated to the 114.00 handle.

Watch Out For:

  • 1:30 am GMT: Australian NAB business confidence (previous reading of 7)
  • 4:30 am GMT: Japanese tertiary industry activity index (0.1% rebound from earlier 0.5% drop expected)
  • 6:00 am GMT: Japan’s preliminary machine tool orders (13.1% previous)