The tone to the markets this week is very different to last week's. We are seeing equities higher once again in Europe, with oil prices also firmed as speculation mounts that there may be some deal in relation to supply cuts between Saudi and Russia. This has allowed Brent to jump above the USD 34pb level. For currencies, naturally those currencies hit hardest by risk aversion are seeing the strongest rebound, such as the Canadian dollar and also the Aussie dollar.
The RBA minutes overnight showed the central bank still relatively positive on the domestic economy, with no real sign that they see a need to cut rates further from their current level. That did not hold from the Bank of Korea, with one member voting for lower rates, pushing down the already weak Korean Won.
For today, the initial focus will be on inflation data in the UK, where the headline rate is seen nudging higher to 0.3%, from 0.2% previously. The pricing in UK markets has changed markedly over the past two weeks, with the risk of an easing from the Bank of England now priced into money markets. Weaker than expected data could well weigh on the currency, which itself has been under pressure for most of the month as sterling has been seen less of a safe haven currency in light of the turmoil being seen globally.
Disclaimer: This material is considered as a marketing communication and does not contain and should not be construed as containing investment advice or an investment recommendation, or, an offer of or solicitation for any transactions in financial instruments.
Past performance does not guarantee or predict future performance. FxPro does not take into account your personal investment objectives or financial situation and makes no representation, and assumes no liability to the accuracy or completeness of the information provided, nor for any loss arising from any investment based on a recommendation, forecast or other information supplied from any employee of FxPro, third party, or otherwise.
This material has not been prepared in accordance with legal requirements promoting the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. This communication must not be reproduced or further distributed without prior permission of FxPro.