FX Markets Start the Week Stable

Market Reviews

The forex markets remain steady at the beginning of the week. New Zealand dollar, euro and Japanese yen are the strongest ones. Meanwhile, US dollar is the weakest one, followed by British pound and Canadian dollar. The pound remains in a range versus major currencies, except versus euro, as Tuesday’s Brexit deal vote approaches.

On stock markets, Asian stocks open the week lower. Nikkei fell 2.19%. Hong Kong HSI fell 1.41%. China Shanghai SSE declined 0.84% and Singapore Strait Times dropped 1.36%. Japan 10 year JGB yield is down -0.0166 at 0.046.

UK parliamentary vote on Brexit deal will take place tomorrow. Yesterday, British Prime Minister Theresa May warned that voting down the deal could take the UK into “uncharted waters”. And, that would mean “grave uncertainty for the nation with a very real risk of no Brexit or leaving the European Union with no deal.” She added “when I say if this deal does not pass we would truly be in uncharted waters, I hope people understand this is what I genuinely believe and fear could happen.”

In its report released over the weekend, the OECD said Australia’s “long span of positive output growth continues”. And, “continued robust output growth of around 3% is projected in the near future”. On RBA, OECD said that “in the absence of negative shocks, policy rates should start to rise soon”. It warned that “monetary conditions remain very accommodative, with the risk of imbalances accumulating further if the low-interest rate environment persists.” And, “in the absence of a downturn, a gradual tightening should start as inflation edges up and wage growth gains momentum.”

Today’s data showed, that New Zealand manufacturing activity rose 2.0% qoq in Q3. Japan GDP was finalized at -0.6% qoq in Q3, revised down from -0.5% qoq. Current account surplus narrowed to JPY 1.33T. Australia home loans rose 2.2% mom in October, versus expectation of -0.5% mom.