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The Greenback was able to hold on to most of its recent gains against some of its peers thanks to positive auto sales data and a strong showing in the stock market. The British pound, on the other hand, was having a pretty downcast day as it extended its losses on looming Brexit risks.

  • BOE FPC minutes: Brexit poses risks to ability of U.K. companies to borrow
  • FPC: Brexit also poses risks to clearing activity which might have to move out of London
  • Brexit Minister Davis: Walking away with no deal is an option
  • Davis: Oversight in Brexit negotiations could cost billions of pounds for taxpayers
  • U.S. total vehicle sales jumped from 16.1M to 18.6M in Sept vs. 16.9M forecast
  • New Zealand GDT auction yielded 2.4% slump in dairy prices

Major Events/Reports

BOE Financial Policy Committee minutes

If you think the Monetary Policy Committee has monopoly of driving pound price action with its meeting minutes, think again! With Brexit at the front and center of U.K. headlines, the transcript of the BOE Financial Policy Committee’s latest huddle is also having a really strong say.

As it turned out, members of the committee agreed that there might be a substantial risk of disruption stemming from Brexit as this could limit the ability of U.K. companies to borrow from European banks. To top it off, it could also have repercussions on clearing activity as some institutions might be forced to relocate away from London.

They also emphasized that risks to U.K. wholesale banking activity appear to be slightly higher than previously thought. Although the domestic financial environment seems relatively stable at the moment, they did warn that it might become difficult for firms to mitigate these concerns after Brexit.

In other breakup-related news, Brexit Minister David Davis reminded that the U.K. government is prepared to walk away without a deal if negotiations don’t go their way. He said:

“On the negotiating front, we are aiming for a good deal. And that is what we expect to achieve. However, if the outcome of the negotiation falls short of the deal that Britain needs we will be ready for the alternative.”

Davis also cautioned that one oversight in the complex negotiation process could possibly cost billions of pounds in taxpayer money.

U.S. equities smash records again

Wall Street has been in a particularly good mood lately, likely due to the renewed focus on the Trump administration’s tax reform plans. Equity indices closed at record highs, buoyed by strong auto sales data as well.

  • Dow 30 index is up 84.07 points to 22,641.67 (+0.37%)
  • S&P 500 index is up 5.46 points to 2,534.58 (+0.22%)
  • Nasdaq is up 15.00 points to 6,531.71 (+0.23%)

Data from Autodata Corp revealed that total vehicle sales jumped from 16.1 million in August to its highest level so far this year at 18.6 million in September, outpacing the consensus at 16.9 million. A closer look at the numbers shows that much of this activity was due to purchases of vehicles to replace those damaged by Hurricanes Harvey and Irma.

This cheery mood didn’t exactly translate to stronger commodities performance, though, and the draw in private inventories as reported by the American Petroleum Institute failed to shore up crude oil prices. The API announced that crude oil stockpiles were down by 4.079 million barrels, which suggests that the official EIA data might print a draw as well.

  • WTI crude oil is down 0.65% to $50.11 per barrel
  • Brent crude oil is down 0.05% to $55.70 per barrel
  • Gold is up 0.13% to $1,276.20 per troy ounce

Major Market Mover(s):

GBP

Sterling carried on with its slide from the previous trading session as Brexit issues added to the downbeat sentiment spurred by the construction PMI miss.

GBP/USD is down 53 pips to 1.3242 (-0.40%), EUR/GBP advanced to a high of .8881 (+0.22%), GBP/JPY is down to 149.30 (-0.41%), and GBP/CAD fell 72 pips to 1.6538 (-0.44%)

NZD

The Kiwi gave up some ground after the GDT auction printed a sudden 2.4% slump in dairy prices, erasing the previous 0.9% gain.

NZD/USD dipped to a low of .7148 (-0.21%), NZD/JPY is down to 80.66 (-0.19%), EUR/NZD ticked higher to 1.6449 (+0.24%), and NZD/CAD is down to .8940 (-0.15%)

Watch Out For:

  • 12:01 am GMT: U.K. BRC shop price index (-0.3% previous)
  • 1:00 am GMT: New Zealand ANZ commodity prices (-0.8% previous)
  • Chinese banks closed for the holiday