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Not even the market holidays in the U.S. and Canada were able to stop major currencies from chalking up noteworthy moves, with the yen mainly taking advantage of risk-off action.

  • U.S. banks closed on Columbus Day
  • Canadian banks closed on Thanksgiving Day
  • Fed official Bullard: Rates won’t have to rise much higher
  • U.K. BRC retail sales monitor down 0.2% y/y in Sept, +0.2% previous

Major Events/Reports:

EU proposal on Irish border checks

According to a report from the Guardian, Senior officials familiar with Brexit talks shared that negotiators are looking into the idea of moving customs checks “away from the Irish border” in order to settle the deadlock on the backstop.

This could involve trade controls being implemented closer to the source rather than the destination of goods, probably an attempt by the EU to strike a compromise with the DUP which is against a border in the Irish sea.

Note that Brexit negotiators from both parties are under pressure to come up with some form of agreement ahead of the summit next week. Another suggestion is to reduce the scale of checks from 100% to 30% over the next couple of years.

More risk-off flows

The gloomy mood from the earlier trading session carried on for the most part of the day as there were no major catalysts to shift sentiment during the U.S. hours.

  • Dow 30 index managed to score 39.73 points to 26,468.78 (+0.15%)
  • S&P 500 index is down 1.14 points to 2,884.43 (-0.04%)
  • Nasdaq is down 52.50 points to 7,735.95 (-0.67%)

Crude oil was in the red for the most part of the day but was able to get a bit of support from a report reflecting a drop in stockpiles at the Cushing storage hub. Apart from that, expectations of shutdowns in Gulf states owing to Hurricane Michael also dampened the supply outlook.

  • WTI crude oil dipped to a low of $73.07 per barrel then pulled up to $74.29 per barrel
  • Brent crude oil found support at $82.66 per barrel then recovered to $83.91 per barrel

Gold was also in the red as dollar strength is likely chewing on the precious metal’s gains. Still, analysts expect this safe-haven asset to stay afloat on account of geopolitical risks from Italy, Brexit, and emerging markets.

Major Market Mover(s):

JPY

The Japanese currency was the main beneficiary of risk-off flows for the session as it even managed to outpace the U.S. dollar.

Perhaps the scrilla found reason to pause on its recent rally when Fed official Bullard mentioned in a Bloomberg interview that rates won’t have to rise much higher to keep inflation in check.

USD/JPY sank from 113.37 to a low of 112.81 before pulling up to 113.10; EUR/JPY slipped further from 130.14 to a low of 129.52; GBP/JPY dropped from 148.06 then pulled up to 147.97, and AUD/JPY fell to the 80.00 handle.

GBP

The pound was able to pare its session losses before the closing bell tolled, thanks to reports that the EU is considering moving trade controls away from the Irish border.

GBP/USD pulled up from a low of 1.3028 to a high of 1.3098; EUR/GBP resumed its slide from .8796 to .8778; GBP/AUD bounced off 1.8450 to a high of 1.8508, and GBP/CAD is up from 1.6932 to 1.6973.

Watch Out For:

  • 12:30 am GMT: Australia’s NAB business confidence index (previous reading of 4)