EUR/JPY Falters, EU & UK Struggle To Reach Accord As Deadline Looms

EUR/JPY took a dip yesterday, as negative vaccine news flow/U.S. fiscal stalemate generated risk-off flows, while increasing bets that the UK will crash out of the EU without a deal dented the Eurozone's shared currency.

• The clock is ticking on UK-EU talks, as the deadline set by London to reach agreement looms. PM Johnson wants to make substantial progress before Thursday's European Council summit or he will walk away from the negotiating table, but there are no signs of any imminent breakthrough. PM Johnson and European Commission Pres von der Leyen will hold a video call today, but the recent source reports pointed to the atmosphere of finger-pointing rather than consensus-seeking, while the Élysée Palace refused to budge on its demands re: fishing rights.
• EUR/JPY trades through yesterday's low, last -16 pips at Y123.74, off its worst levels this session. A slide under Oct 5 low of Y123.31 would turn focus to Sep 29 & Oct 2 lows of Y123.03, a key near-term support. Meanwhile, a recoil above Oct 13 high of Y124.48 would bring Oct 9 high of Y125.09 into play.
• The Eurostat will release EZ industrial output for the month of August today, while ECB speaker slate features Lagarde, Lane, Mersch, Villeroy & de Cos.