Good morning,

CNH/CNY: A New Governor of the PBOC

The National People’s Congress in China have voted in Yi Gang as the new Governor of the People’s Bank of China this morning to replace Zhou Xiaochuan. Yi Gang has served as a deputy governor under Zhou so this may be a sign that the PBOC aim to continue the same path for monetary policy. Yi Gang’s immediate task will be to respond to the normalisation of US interest rates.

GBP: Can we extend the transitionary period?

Another clash within Parliament over the weekend as a report released by the All Party Brexit Select Committee suggested to increase the transitional period longer than 21 months to help the UK adapt to changes. Unsurprisingly, Brexiteers such as Jacob Rees-Mogg have strongly opposed this idea. Monday may provide more back and forth on this proposal.

No significant economic data release from the UK today.

USD: Fed member Bostic to speak

This is the week of the Federal Reserve meeting. The question is: will they hike rates or not?

Monday begins with FOMC member Bostic speaking in the afternoon. Markets will be watching closely for any sign of a rate hike this Wednesday and the dollar may be sensitive to any indication. No major economic release from the US today.

EUR: G20 Meeting

A busy day for the euro ahead as we have the G20 meeting to start the week. Eyes will be on the discussion between German finance minister Scholz and US Treasury secretary Mnuchin and whether there can be any dissuasion from the US steel and aluminium tariff plans this week. Scholz has been an advocate of free trade and emphasised his own concerns over protectionism in global markets.

We will also see the release of EU trade balance numbers giving us the balance between exports and imports. A positive demand seen in EU export may help strengthen the EUR. Additionally, we have EU construction output which will show us the strength of the EU construction sector.

Have a great day.

Bradley Graham, Premier Dealer | Corporate Desk