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GBP Extends Bounce, With GBP/USD Nearing Pre-Budget Levels

FOREX
  • The recovery in UK assets continues, with GBP/USD nearing the Friday (i.e. pre-mini budget) levels at 1.1274 and rallying against all others in G10. The moves coincide with a further pull lower in the UK yield curve, putting the longer-end under additional pressure as the BoE's emergency action in the middle of the week tempers market uncertainty.
  • The more stable market backdrop has helped risk assets find bottom, putting the e-mini S&P back above the 3650 level and around 60 points above the late Thursday low.
  • For currencies, this has meant the dollar trades on the backfoot, while AUD trades more favourably. NOK should be benefiting from the calmer market sentiment, however the Norges Bank's larger-than-expected FX sales across October have tempered any progress in the currency. The bank are to sell NOK 4.3bln per day on behalf of the sovereign wealth fund.
  • Personal income and spending data crosses Friday, with further focus on September's MNI Chicago PMI as well as the final Michigan confidence read for this month.
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  • The recovery in UK assets continues, with GBP/USD nearing the Friday (i.e. pre-mini budget) levels at 1.1274 and rallying against all others in G10. The moves coincide with a further pull lower in the UK yield curve, putting the longer-end under additional pressure as the BoE's emergency action in the middle of the week tempers market uncertainty.
  • The more stable market backdrop has helped risk assets find bottom, putting the e-mini S&P back above the 3650 level and around 60 points above the late Thursday low.
  • For currencies, this has meant the dollar trades on the backfoot, while AUD trades more favourably. NOK should be benefiting from the calmer market sentiment, however the Norges Bank's larger-than-expected FX sales across October have tempered any progress in the currency. The bank are to sell NOK 4.3bln per day on behalf of the sovereign wealth fund.
  • Personal income and spending data crosses Friday, with further focus on September's MNI Chicago PMI as well as the final Michigan confidence read for this month.