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Market Looks Optimistically Toward Resumption of Brexit Talks

FOREX

GBP trades well early Monday, rising against all others in G10 as markets appear to taking an optimistic view of the currency ahead of the reconvening of EU and UK negotiators this week. Talks formally resume on Tuesday, with plenty of sell-side analysts as well as journalists anticipating compromise and progress this week that could alleviate the worst impacts of an abrupt end to the transition period on Dec31.

The USD is generally weaker, snapping some of the gains made last week for the USD index. Focus turns to the first Presidential debate late Tuesday, in which Biden and Trump meet face-to-face for the first time in the campaign. Reports on Trump's returns out over the weekend will likely feature.

Front-end implied vols are a little higher across G10, with GBP understandably making the most notable moves.

ECB's Lagarde & Schnabel and Fed's Mester all make speeches Monday. Dallas Fed manufacturing numbers are the data highlight.

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