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US Open Preview – Sterling largely consolidates massive losses with PM May’s leadership on tightrope
November 16, 2018 1:26 pmVideo
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Here are the latest developments in global markets:
Day ahead: Brexit and updates on Sino-US trade overshadow economic releases
The remainder of the day is light in terms of data, with developments on other fronts such as Brexit either way stealing the thunder from any releases.
Sterling is expected to remain volatile to Brexit news, as the situation appears fluid at the moment, to say the least. The prospect of further cabinet departures is well on the table, as well as that of a leadership challenge that could topple PM May from her position.
Meanwhile, attention is also falling on Sino-US trade relations. China is proceeding with concessions to the US that may on the one hand fall short of the Trump administration’s demands, but on the other they could pave the way for a meaningful de-escalation of tensions. Such an outcome will likely bolster risk-on currencies such as the Aussie, as well as equities.
Elsewhere, any news on the EU-Italy budget standoff have the potential to move the euro. Signals that Italian PM Conte is looking to work with the EU over his government’s 2019 budget are definitely euro-positive, given they deviate from the previous confrontational rhetoric. It remains to be seen though whether the positive momentum will be maintained, or whether the differences between the two sides would sooner or later lead to a clash.
On the data front, Canadian manufacturing sales for September are due at 1330 GMT, with US industrial and manufacturing output data following at 1415 GMT. Monthly growth in industrial production is projected to ease to 0.2% from September’s pace of 0.3%, though this would still mark the print’s fifth straight month of increases. Figures on October’s US capacity utilization are also due at 1415 GMT.
Bundesbank President and ECB policymaker Weidmann will be speaking at Frankfurt’s banking conference at 1300 GMT, while non-voting FOMC member in 2018 Evans will be participating in a Q&A session at 1430 GMT.
In energy markets, Baker Hughes data on active oil rigs in the US are slated for release at 1800 GMT.
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