All quiet after three-day weekend

With the US returning to their desk after a three-day weekend, they’ll find the US dollar relatively unchanged from Friday’s levels with the exception of a slight weakening against the UK pound. While Twitter and the news media didn’t turn off for Columbus Day, economic data did, and there have been little/no developments on the financial front since the volatile payrolls report on Friday morning.

Today’s calendar is similarly dry and doesn’t heat up until the FOMC minutes due tomorrow lunchtime ahead of PPI figures on Thursday and retail sales & CPI numbers on Friday.

NAUKFTA?

Here in the UK, the government’s stepped up pressure on both the UK and EU negotiating teams by telling lawmakers that preparations have begun to prepare for the UK leaving the EU on March 29th 2019 with no deal signed. In our opinion, this so-called cliff-edge Brexit remains the worst form of Brexit for businesses who trade internationally given the delays to goods and services trade, the unknown legal structure of trade partnerships and the uncertainty over additional taxes and costs.

This has raised speculation among the media that May and team could consider a proposal to join the North American Free Trade Agreement with the USA, Canada and Mexico. How palatable this would be to the US government (who recently installed tariffs of over 200% on planes built in Northern Ireland) and their counterparts in Ottawa and Mexico City remains to be seen but there is bound to be political resistance at home.

Sterling remained relatively unmoved by this all and praise for her statement from foreign secretary (and, some would say, burgeoning leader) Boris Johnson may have gone some way to allaying fears that an imminent coup against the UK prime minister remains just out of sight.

Judgement for Puidgemont

It looks like we are finally getting to some form of conclusion to the Catalan question today with a meeting of the Catalan parliament which will see either a unilateral independence call or not.

Catalan companies are announcing their decision to leave the region at an increasing rate but the separatists are continuing with a plan to form a coalition with the populist Podemos party and members of the Basque separatist movement in order to obtain a vote to get rid of PM Mariano Rajoy.

Have a great day.