Euro and Swiss Franc Strengthen, Commodity Currencies Broadly Down
Commodity currencies are trading as the weakest ones. Meanwhile, Swiss franc and euro are the strongest ones for today. The British pound is trading mixed, as there is no new developments regarding May’s leadership challenge and Brexit.
On stock markets, FTSE added 0.59%, DAX gained 0.07% and CAC rose 0.15%. Earlier in Asia, Nikkei rose 0.65%, Hong Kong HSI added 0.72%, China Shanghai SSE increased 0.91% but Singapore Strait Times fell 0.6%.
According to the Bundesbank’s monthly report, the German growth will rebound after a poor third quarter as the economy works through one-off issues that held it back through the summer months. The GDP of the Eurozone’s biggest economy dropped by 0.2% in Q3, with the fall due almost entirely to weakness in the car industry, which struggled to adjust to new emission testing requirements. Still, the German economy is likely to expand quite strongly again by the end of the year.
Graham Brady (chair of the 1922 Committee) predicted even if there is a leadership challenge, UK PM Theresa May is going to win it. However, Brady is also dissatisfied with the May’s Brexit deal and branded it as “tricky”. Meanwhile, CBI President John Allan said even though May’s Brexit deal is “not perfect”, it “opens a route to a long-term trade arrangement, it unlocks the transition period – the very least that companies need to prepare for Brexit”. And more importantly, he emphasized that ” it avoids the nightmare scenarios a no-deal departure, which would be a wrecking ball for our economy.”
Under the Franco-German proposal of the Eurozone budget proposal, the objective of the Eurozone budget is to foster convergence and support reforms “in particular by co-financing growth-enhancing public expenditures such as investments, research and development, innovation and human capital”.
Mario Centeno (Eurogroup President) hailed that the Franco-German proposal of the Eurozone budget is “breakthrough” on reforms to be discussed among finance ministers in December. Centeno said “the contribution of France and Germany on the Eurozone budget is an important topic for today’s discussion,” and, “it can be a sort of a breakthrough toward December”.