Brexit progress and Canadian CPIs

Brexit Breakthrough

The big news came out of Brussels yesterday, as the UK and the EU managed to get closer towards reaching a Brexit deal. Of course, the important thing to add here is that, for now, this is still in a draft form, which could still be amended. Nevertheless, it was difficult not to notice the smile and the good mood of the British Prime minister Theresa May, who appeared in front of the press stating that progress has been made. Certainly, the pound-traders took the announcement in a very positive way, by pushing GBP higher against all of its major counterparts.

As For The Rest Of Today’s News

Today we get preliminary PMIs for November from several European nations and the Eurozone as a whole. Expectations are for the bloc’s manufacturing and services indices to have declined to 51.9 and 53.5, from 52.0 and 53.7 respectively, something that is likely to drag the composite PMI down for the fourth consecutive month. Specifically, the composite index is forecast to have declined to 53.0 from 53.1. Coming on top of the preliminary GDP data for Q3, which showed that the Euro area economy slowed to +0.2% qoq from +0.4%, another slide in the composite PMI could increase concerns that the loss in economic momentum dragged into the last quarter of the year as well. This was also acknowledged by ECB President Draghi last week. However, Draghi repeated once again that the overall risks to the growth outlook remain broadly balanced, suggesting that the ECB is unlikely to alter is policy plans any time soon.

GBP/CHF — technical Outlook

Yesterday, the British pound got a real good boost against all of its major counterparts, with no exception of the Swiss Franc. GBP/CHF has slightly retraced back down, but this could be seen as a small correction before the pair might rush back up again. That said, the Brexit tensions still remain, hence why will stay a bit more on the cautiously-bullish side.

AUD/CAD — Technical Outlook

It looks like the Canadian dollar is picking up the pace again. AUD/CAD started ranging between the 0.9555 and 0.9655 levels but currently sits very close to the lower bound of that range. Our oscillators are suggesting that there could be a bit of more weakness to come, nevertheless, we will remain cautious and wait for a confirmation break first.

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