For a PDF copy of this edition, click here.
Sterling is the prime mover today as the European Union expresses the hope of negotiating a softer Brexit deal amidst increasing noise that the UK parliament will wrest control of the Brexit process from the May government and get a delay in place for further negotiations with the EU.
The assumption is that the Article 50 could be delayed until the end of this year and the EU is making friendly noises on negotiation an entirely new, softer Brexit deal, although one that would violate most of May’s red lines (like begin bound within the customs union, EU court of justice, etc.), meaning that these negotiations would have to be directly with Parliament or with a new not-yet-elected government. Today’s FX Breakout monitor Page 1
: The AUDNZD breakout higher was firmly rejected overnight, to say the least, after New Zealand reported a slightly hotter than expected Q4 CPI figure, and probably as importantly, on the AUD-negative impact of concerns that US-China trade negotiations are going nowhere (US cancelled lower-level trade talks on lack of progress).
Elsewhere, GBP pairs are breaking out all over with GBPUSD and GBPJPY (on page 2) joining the party today. Note as well that the USDJPY rally has proceeded for so long now that the old-19-day high is about to roll out of view and new local highs in coming days would be new 19-day highs.