Key Points:

Politicians continue to argue over Brexit deal

Stronger than expected US Retail Sales up 1.9% from 0.8% expected

US stocks and USD largely unchanged to close out the week

Despite Brexit and US retail sales headlines FX was largely contained to a quiet day with recent ranges holding. GBP was the most volatile as algorithms pushed the price around on EU/UK barbs over current negotiations with EU’s von der Leyen and UK’s Johnson the key culprits. The USD was on the backfoot early in the day but regained some ground into the close. Retail sales came in at 1.9% from 0.8% a good beat but weaker industrial production and no further developments around a stimulus deal continued to sour investors mood with US indices little changed on the day. Nasdaq underperformed at -0.36% whilst the S&P500 and DJ eked out miniscule gains. AUD held above the recent lows around 0.7060 but failed to regain 0.7100 likewise the other commodity currencies were quiet, although the CAD made slight gains on better data and NZ PM Ardern won a second term as expected which is unlikely to impact the NZD as things will remain as is. Press over the weekend in Europe focussed on the escalation of virus cases and further lockdowns ahead in the major cities. The US election rollercoaster continues with right wing anti Biden stories starting to surface as we head into the final 2 weeks trying to sway swing voters into reinstalling Trump. The Asian session ahead today will see Chinese GDP released with the revised annual expectation to be 2% this year which will be way ahead compared to any other nation, along with retail sales and industrial production. With Pelosi announcing a Tuesday deadline for any stimulus deal the markets will be fixed on any settlement around that and expect any price action to be dictated around those talks. Expect a quiet session ahead before we get back to Brexit noise along with speeches from both Fed’s Powell and ECB’s Lagarde.

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