Good morning,

This morning we continue with the trade positivity around the US and China, with haven assets seeing further depreciation on the risk-off sentiment, with the most notable being a two week low for the Japanese Yen.

The low risk, more amicable environment is beginning to support the idea of a stronger 2020, with recession concerns tentatively taking a back seat, although the obvious caveat remains that the US/China trade deal must see completion for this to take hold.

Looking at the pound, markets continue to support a more stable supportive base case rate, with GBPEUR flirting with 1.17 yesterday, however we have opened this morning around the somewhat magnetic hold of 1.1670/80.

Whilst confidence around a Conservative victory is growing through recent polls, the pound seems to have priced this in to a pretty heavy extent. This would seem to present a disproportionate variance to the downside. Therefore, a situation where polls indicate a thinning lead for the Conservative party may present a heavier risk of losses.

Today is a thin data day in the face of a busy rest of the week, so markets will likely search for some moderate momentum throughout the day before key data points throw some volatility into the mix. The US will be up tomorrow with preliminary  GDP figures and employment.

Have a great day.

Author: Ross Hammond, Senior Corporate Account Manager