GBP Rallies On Techs & Weekend Headlines, NZD Receives Boost From NZ Retail Sales Survey

Sterling showed some strength at the start to the week, racing to the top of the G10 pile on the back of technical and fundamental tailwinds. BBG sources cited positioning for buy-stops above Nov 11 & 18 highs of $1.3312 amid liquidity thinned by a Japanese public holiday. Cable accelerated gains upon the breach of that figure, printing best levels since early Sep. On the fundamental side, the UK and Canada agreed to keep their current trading conditions post-Brexit and enter talks on a broader deal, UK Cll'r was set to announce a boost to spending on public services Wednesday, while the Telegraph reported that UK regulators could give a green light for the Pfizer Covid-19 vaccine within a week. In a separate piece, the Telegraph reported that UK PM Johnson is set to reach out to European Commission Pres von der Leyen in a bid to "clear away the final barriers to a deal which both sides now believe is well within reach", albeit the article pointed to familiar sticking points.

• NZD was another top G10 performer, following the release of a strong quarterly retail sales survey out of New Zealand. Retail sales ex inflation surged 28.0% Q/Q in Q3, easily beating expectations of a 19.0% increase, boosted as the country lifted lockdown restrictions.
• Safe havens traded on the back foot, with USD leading losses amid some positive musings surrounding Covid-19 vaccine/treatment matters. News and data flow in Asia hours was thin, with Japan having a day off, leaving participants to reflect on weekend headlines and familiar risks.
• ZAR took a hit early on, in the wake of Friday's downgrade to South Africa's credit ratings from Fitch & Moody's, but the rand recovered thereafter.
• KRW inched higher after early South Korean trade data showed a continued recovery in shipments, even as local coronavirus worry continued to linger.
• Focus turns to a slew of preliminary PMI readings from across the globe, as well as comments from Fed's Barkin, Daly and Evans, BoE's Bailey, Haldane, Tenreyro & Saunders, ECB's Schnabel & BoC's Gravelle.