Daily thread to exchange ideas and to share your thoughts
Happy Monday, everyone! Hope you all had a great weekend and that you're all pumped up for the new trading week. It's been a lively start to proceedings so far today with some good all-round action seen across the board. The greenback started things on the back foot while the yen was the leader in early Asian trading.
However, all that is changing with the yen now slipping down the pecking order as risk begins to show signs of recovery on the day. Meanwhile, the pound got a bit of a pop earlier after the ECJ ruling headlines but those gains were short-lived as they offered nothing new to the picture. As mentioned then, all the focus is on tomorrow's vote and the pound will stay pressured as long as the odds are still stacked against Theresa May. There's also the risk of the vote being postponed altogether so that's something to potentially look out for over the next few sessions.
Risk and dollar softness are the two main themes so far in markets and are likely to be the dominant themes as we close out the year. The former is still banking on progress being made in the US-China trade rhetoric and reports of China stepping up US soybean purchases is welcome news for the time being.
Meanwhile, the latter will be a key focus of markets in the week ahead with neutral rate talks and yield curve inversion concerns sparking a real debate on the Fed's capacity to hike rates next year. The central bank will be meeting next week so expect plenty of attention to be cast upon the dollar leading up to that.
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