Draws Support From Weekend Headline Mix

Sterling picked up a bid in early trade and has remained buoyant, outperforming all of its G10 peers but the kiwi. Traders speaking with BBG cited positioning for buy-stops above recent Nov 11 & 18 highs coupled with liquidity thinned by a Japanese holiday. On the fundamental side, UK Cll'r Sunak is set to announce a boost in spending for public services, the UK and Canada agreed to keep their current trading arrangements post-Brexit and start talks over a broader deal, while the Telegraph reported that the UK could give the Pfizer Covid-19 jab a thumbs-up within a week and (in a separate piece) that UK PM Johnson will reach out to European Commission Pres von der Leyen to "clear away the final barriers to a deal which both sides now believe is well within reach".

• UK Cll'r Sunak will unveil departmental budgets for the next FY on Wednesday. The Cll'r's office said that Sunak will commit to bossting spending on infrastructure and public services, which will be put "at the heart of our economic renewal". The Cll'r refused to comment on potential tax increases, noting that Wednesday's speech will focus on spending.
• Apart from the aforementioned Telegraph report, the weekend saw a portion of Brexit noise, with Cll'r Sunak warning that London doesn't want a deal at any price.
• Cable has broken out of this month's range and printed best levels since early Sep. The rate sits +47 pips at $1.3322, with bulls looking to take out Sep 2 high of $1.3403. Conversely, a retreat under Nov 19 low of $1.3196 would open up Nov 12 low of $1.3106.
• GBP/JPY has added 36 pips and trades at Y138.21. Gains past Nov 16 high of Y138.87 would open up Nov 11 high of Y140.30. On the flip side, a dip through Nov 19 low/100-DMA at Y137.20/17 would turn focus to the 50-DMA at Y136.52.
• Flash UK Markit PMIs and parliamentary testimonies from BoE's Bailey, Haldane, Tenreyro and Saunders are due today, while BoE's Haskel is set to speak Tuesday.