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Market View

Market Recap – Risk on

Friday, October 11, 2019 10:54 AM GMT

The prospects of a Brexit breakthrough increased following yesterday’s meeting of the Prime Ministers of the UK and Ireland. Today negotiations resume in Brussels between Stephen Barclay, UK’s negotiator, and Michel Barnier, EU’s negotiator. A Brexit deal could happen at the 17-18 October EU summit, a day before Boris Johnson’s deadline to ask for an extension.  The new scenario includes a provision for the consent of Northern Ireland's politicians to be sought every four years. Given their periodic consent, Northern Ireland will adhere to EU agricultural legislation. GBP strengthened on the news.

Following the yesterday’s meeting between Liu He, the Chinese Chief negotiator, with Bob Lighthizer and Steven Mnuchin, the US negotiators, President Trump announced that he will meet Liu He personally. Note that the Chinese did not intend to compromise on their industrial policies and their government subsidies, but they are willing to decrease the trade balance with the USA, to buy US agricultural production, to ease market access and work on IP and investment protection. Τhe postponement of next week’s tariffs and a currency deal are expected.

The monthly report of OPEC included a small downward revision of the global oil demand growth and the confirmation that the Saudi Arabian production been restored.

Financial markets are in a risk-on mode, as noted in the yesterday’s blog.

Macro releases: Yesterday’s US inflation readings favor a new rate cut at the upcoming FOMC on 30 October. The probability of a rate cut stands at 80%. Today’s economic agenda includes the Canadian unemployment rate and US inflation expectations. Note, that as we are only 1 week ahead from the upcoming Canadian Elections, Canadian polls become more important than the Canadian macro releases.

Disclaimer

The views expressed do not constitute investment or any other advice /recommendation /suggestion and are subject to change. Reliance upon information in this material is at the sole discretion of the reader. Opinions expressed in the report do not represent the opinion of ZuluTrade Social Trading Platform and do not constitute an offer or invitation to anyone to invest or trade.

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