Collinsonfx Daily Market Commentary

The surge in markets the previous day, triggered by hopes of a Brexit deal between the UK and EU, settled as the deadline fast approaches. EU leaders meet tonight and they were hoping to have a tangible deal in front of them to consider. The GBP has reflected the growing confidence over a deal, charging up to trade 1.2830, while the EUR pushed up to 1.1065. UK CPI came in around 1.7%, well above the EU at 1%, while the NZ CPI was 1.5%. Growth has been a serious challenge to Western economies, impaired by the US/China trade war, although UK economic activity is set to explode post-Brexit.

US support for the Hong Kong freedom protesters has also become an obstacle to the US/China trade agreement, which adds to doubts over details yet to be finalised. NAHB House Market Index continued to progress, supporting the housing sector, which remains a leading indicator. NZ CPI data was slightly better than expected and helped support the currency around 0.6280, while the AUD slipped back to 0.6750.

Brexit and the US/China trade deal continue to dominate markets and the Fed's Beige Book will give an insight into market conditions within the US domestic economy.