Sterling on top as deal speculation mounts....>

FOREX: Sterling on top as deal speculation mounts

-GBP flew on Friday, ending the week very well following the report in The Times

suggesting a key hurdle to securing any UK EU Brexit deal could be removed. The

Conservatives' allies in parliament, the Northern Irish DUP, could soften their

stance toward the acceptance of EU rules in any deal and potentially solve the

key border issue in one fell swoop. This prompted markets to sharply re-price

the odds of a deal by the October 31st deadline. This boosted GBP/USD to the

best levels since late July and well within range of the 100-dma at $1.2516.

-Elsewhere, price action was more muted. A fearsome rally in Treasury yields

(10yr yields rose as much as 10bps at some points of the session) failed to

provide much support for the DXY, as currency markets appeared to flip focus to

the stacked calendar next week. Nonetheless, USD/JPY holds close to the recovery

high having printed Y108.26 this week.

-German ZEW, UK and Canadian inflation, UK retail sales, rate decisions from the

Bank of England, Swiss National Bank, Norges Bank, Bank of Japan and, of course,

the Federal Reserve take focus in the coming week.