USD has been broadly weaker against a stronger sterling. UK Brexit Minister Dominic Raab says he can reach a deal by 21 November 21, but that seems likely to be on EU terms. We remain negative on “soft” Brexit developments and view the pound’s recovery as an opportunity to short. An inflation report today and the Bank of England’s monetary policy meeting are likely to highlight uncertainty. Despite tight labour markets, prices are decelerating.
Elsewhere, markets have shifted sideways as Europe takes off for All Saints Day. A bounce in risk sentiment is supported by China’s fiscal easing and solid US economic data (stronger PMI and an expected good ISM read this afternoon). However, recovery is tentative. The Shanghai composite is only slightly higher at 0.13%. EUR/USD recovered off 1.1300, yet the US economic data should derail gains
By Peter Rosenstreich
