Crunch Time

Sterling had a poor finish to the week, falling against all others in G10 as markets gear for yet another self-imposed deadline for make-or-break trade deal negotiations on Sunday evening. Options markets have taken note and are pricing in a sizeable swing for GBP on Monday, indicating decent two way risk in GBP crosses. Nonetheless, it may come as no surprise that some see the negotiations going beyond this weekend, with the German foreign minister suggesting talks could extend through to next week.

Equities retreated into the Friday close, capping a negative week for stocks globally. Losses were muted, however, with the S&P 500 still well within range of the alltime highs posted midweek. This supported JPY throughout the Friday session, which rose against all others in G10.

Focus in the coming week turns to global central banks. Rate decisions are due from the US, UK, Norwegian, Swiss, Hungarian, Mexican central banks (among others), which should keep markets busy regardless.