Global market watch - 19th November 2019

Sterling remains well supported on expectations that the Conservatives will win a majority in next month’s election, enabling Boris Johnson to get his Brexit deal through Parliament. Further gains before the election look difficult for sterling, because this positive scenario is largely already priced in. Tonight, sees the first TV debate of the election, as Boris Johnson goes head to head with Jeremy Corbyn on ITV, after the Lib Dems and SNP lost their legal challenge to be included.

It’s another quiet day on the data front, and as far as the euro is concerned, traders are waiting for Friday. Eurozone PMI figures are due for release on Friday, and the new President of the ECB, Christine Lagarde, is also due to speak.

The dollar weakened overnight as hopes for a pre-Christmas trade deal between the US and China faded a little. Press reports said China is pessimistic about chances of agreeing a deal soon. Also, worth noting that President Trump met with Fed Chair Powell to discuss the US economy yesterday. A Fed statement said Powell’s remarks were consistent with his comments to the US Congress last week. We already know that the President thinks US interest rates are too high, but it seems unlikely that yesterday’s meeting will see a shift in Fed policy.
The Aussie dollar fell overnight after minutes from the Reserve Bank of Australia showed the central bank considered cutting rates earlier this month. However, the RBA decided against a rate cut due to the risk of the possible negative effects on savers.

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