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Choppy price action today, but the pound was clearly in demand since it closed higher against its peers. The Swissy, meanwhile, was the worst-performing currency of the session, likely because of the risk-on vibes.

  • German PPI m/m: 0.3% vs. 0.1% expected, 0.2% previous
  • German PPI y/y: 3.1% vs. 2.9% expected, 2.6% previous
  • Euro Zone current account: €33.3B vs. €26.2B expected, €31.5B previous
  • U.K. public sector net borrowing: £5.3B vs. £5.7B expected, £5.1B previous
  • Canadian CPI and retail sales reports coming up
  • Fed Chair Yellen will be speaking later

Major Events/Reports

Positive Brexit-related rhetoric

There were plenty of Brexit-related headlines during today’s morning London session. And most of them were positive for the pound.

German Chancellor Angela Merkel, for example, said earlier that:

“As far as I am concerned, I don’t hear any reason to believe that we are not going to be successful”

Moreover, Merkel said that:

“[I]n contrast to what you hear in the British press, the [Brexit negotiation] process is moving forward step by step.”

“You get the impression that after a few weeks you already have to announce the final product, and I found that — to be very clear — absurd.”

Merkel did say, however, that “not enough” progress has been made on the U.K.’s bill for leaving the union.

British Prime Minister Theresa May also spoke earlier today. And she admitted that there is “difficulty” in the Brexit negotiations. However, she added that “There is increasingly a sense that we must work together to get to an outcome we can stand behind and defend to our people,” which is why she called on the E.U. to join the U.K. in a “joint effort and endeavour.”

And last but definitely not least, European Council President Donald Tusk announced earlier that the “green light” has been lit on phase of the Brexit talks, which refers to E.U.’s plans for post-Brexit trade negotiations with the U.K.

Risk-taking to end the week

After yesterday’s severe bout of risk aversion, the major European equity indices were able to stage a broad-based recovery during today’s morning London session.

And market analysts say that the risk-on vibes today were due to positive earnings results for European companies, as well as risk sentiment spillover after earlier news that the U.S. Senate adopted the Budget, which is seen is as the first step for opening the way for Trump’s tax plans.

  • The pan-European FTSEurofirst 300 was up by 0.30% to 1,535.13
  • Germany’s DAX was up by 0.26% to 13,024.00
  • The blue-chip Euro Stoxx 50 was up by 0.34% to 3,612.00

The risk-on vibes may carry over into the U.S. session since U.S. equity futures were also in the green.

  • S&P 500 futures were up by 0.23% to 2,566.50
  • Nasdaq futures were up by 0.26% to 6,113.88

Major Market Mover(s):

GBP

The pound was the one currency to rule them all during today’s morning London session, apparently because of easing Brexit-related jitters due to the conciliatory rhetoric between the E.U. and the U.K. during the session.

GBP/USD was up by 55 pips (+0.42%) to 1.3183, GBP/JPY was up by 65 pips (+0.44%) to 149.22, GBP/CHF was up by 74 pips (+0.58%) to 1.2941

CHF

The safe-haven Swissy didn’t do too well during the morning London session, very likely because of the risk-friendly environment in Europe.

USD/CHF was up by 14 pips (+0.15%) to 0.9817, EUR/CHF was up by 15 pips (+0.13%) to 1.1598, NZD/CHF was up by 16 pips (+0.23%) to 0.6871

Watch Out For:

  • 12:30 pm GMT: Canadian headline CPI (+0.3% vs. +0.1% previous)
  • 12:30 pm GMT: Headline (+0.5% expected vs. +0.4% previous) and core (+0.3% expected vs. +0.2% previous) readings for Canada’s retail sales
  • 2:00 pm GMT: U.S. existing home sales (5.30M expected, 5.35M previous)
  • 11:30 pm GMT: Fed Head Yellen will speak