Brexit talks drag on as Prime Minister Theresa May tries to persuade European Commission chief Jean-Claude Juncker to modify her withdrawal deal to push through British parliament… Tier 1 data saw more concerns for the Eurozone as the latest Manufacturing PMI missed expectations at 49.2, more importantly dropping below the key 50 level of expansion… Price action saw Sterling lifted as hopes the PM can secure key Brexit changes to her deal… GBPEUR and GBPUSD both manged to hold around key psychological levels of 1.15 and 1.30 respectively.
Trump’s mantra of ‘Making America Great Again’ is echoing across the US economy as third quarter GDP growth outpaced market consensus with a print of 3.5%. Consumer spending and businesses increasing their inventories aided the strongest back to back quarters for growth in over two years.
Today’s print was crucial for Trump and the GOP ahead of the Midterm elections as GDP seems to be aligning with the President’s target for 2018, however it could spark the Fed to consider a more aggressive monetary policy.
Balraj Sroya quoted in the Guardian
Mario Draghi stuck to the script again at today’s ECB Press Conference, delivering yet another ‘balanced’ assessment of the eurozone’s economy. The ECB President quelled recent concerns of weaker economic data as merely a slowdown of growth momentum, not a downturn. This aside, the ECB remain committed to ending the central bank’s bond-buying programme come December.
Transitory or not, Draghi and Co. will need to buy themselves more time to distinguish what effect trade wars, Brexit and the recent Italian budget crisis will have on its interest rate hike timeline in 2019.
Anthony Kurukgy quoted in the Guardian