Risk is back on this morning, after the US and China agreed to a temporary truce in the trade war at the G20 in Argentina over the weekend. The US has will shun its plan for 25% tariffs on $200 billion of Chinese imports from 1st January, or any other implementation of trade restrictions for 90 days, just while the respective governments try to solve issues such as forced technology transfer and intellectual property protection. The greenback is broadly weaker as a result, and GBP/USD opened 80 points higher.
The weekend Brexit headlines haven’t had too much of an impact on the pound this morning, which is unusual. The PM now seems to be under pressure from Labour to publish the full legal advice on her Brexit deal. In the meantime, we’ve heard plenty of “what if” theories should the plan not make it through parliament on the 11th December, including suggestions that May will struggle to survive a confidence motion. The DUP seem to be behind this one.
It’s a busy week for market data this week, with UK PMIs due through the early part of the week. Carney and Powell are also due to speak through the early-middle part, and we finish of with US employment data by way of US Non-Farm Payrolls, a notorious lottery figure. The US-China rhetoric will no doubt continue and play a large part in influencing risk appetite, and so - of course – will Brexit headlines, especially so as we get closer to 11th December.