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The pound returned some of its previous day gains when U.K. Finance Minister Hammond emphasized the uncertainties Brexit could bring to the economy. And with no other major reports on the docket, majors sat on their hands ahead of today’s FOMC minutes release.

  • U.K. Fin Min Hammond: “Cloud of uncertainty” about Brexit hanging over economy
  • Hammond: Need to remove this uncertainty by making progress in negotiations
  • Hammond: Bad-tempered breakdown of Brexit talks still a possibility
  • Spanish PM Rajoy: Will formally ask Catalonia if it declared independence or not

Major Events/Reports

U.K. Finance Minister Hammond’s speech

In a session with the U.K. Treasury Select Committee, Finance Minister Hammond warned about the Brexit “cloud of uncertainty” that looms over the economy.

He did acknowledge that the economy is fundamentally robust and that they have a strong outlook for the future but reiterated the need to remove the “temporary damper” pronto by making progress in Brexit negotiations.

Hammond also mentioned that they need to brace for a potentially bad-tempered breakdown of Brexit talks, especially if EU nations insist on acting on their own interests. However, he also expressed hesitation to set the budget for a no-deal decision, explaining that they need to determine the realistic worst case scenario first.

Statement from Spanish PM Rajoy

A day after Catalonia backpedaled from officially declaring secession from the rest of Spain, the country’s Prime Minister gave a highly-anticipated statement to confirm that the government will formally ask the Catalan leadership what it wants.

Note that this is a legal requirement that must be completed before any other steps are taken under Article 155 of the Spanish Constitution. Rajoy accused Catalan President Puigdemont of causing confusion by signing a declaration of independence but stopping short of starting negotiations. He said:

“There is an urgent need to put an end to the situation that Catalonia is going through – to return it to safety, tranquillity and calm and to do that as quickly as possible.”

Tight trading ahead of FOMC minutes

Market watchers seem to be on edge ahead of the release of the September FOMC meeting minutes, leaving European bourses to close mixed for the day.

  • German DAX is up 8.75 points to 12,975.25 (+0.06%)
  • French CAC 40 is down 2.90 points to 5,360.50 (-0.05%)
  • FTSE 100 is down 0.52 points to 7,357.75 (-0.01%)

U.S. stock market futures are also pointing to a shaky open:

  • S&P 500 futures are down 1.50 points to 2,547.00 (-0.04%)
  • Nasdaq futures are down 0.62 points to 6,064.63 (-0.01%)
  • Dow 30 futures are up 69.61 points to 22,830.68 (+0.31%)

 

Major Market Mover(s):

GBP

The pound took a few blows against majority of its rivals but managed to dodge punches from others.

GBP/JPY is down 37 pips to 148.08 (-0.25%), GBP/AUD slid to 1.6936 (-0.23%), GBP/CHF dropped 27 pips to 1.2841 (-0.21%), and GBP/USD retreated to 1.3193 (-0.08%)

 

Watch Out For:

  • 3:00 pm GMT: U.S. JOLTS job openings (decline from 6.17M to 6.13M expected)
  • 7:00 pm GMT: September FOMC minutes (Review their actual statement here!)
  • 10:45 pm GMT: New Zealand FPI m/m (0.6% previous)