Sterling Recovers Well Off Multi-Month Low

After a shaky start in which GBP/USD bottomed out at new multi-month lows, GBP ended up outperforming Wednesday, with markets taking hope from favourable (albeit spurious) reports suggesting progress has been made between the UK and EU in informal trade talks. The gains in GBP are small at this stage, however, and may reflecting short-covering or near-term profit-taking. This makes Thursday's speech from BoE's Bailey particularly important.

Antipodean currencies suffered throughout Wednesday, with AUD and NZD falling against all others in G10 as influential sell-side outfits bring forward their RBA rate cut calls. AUD/USD showed below the $0.71 handle in response, hitting the lowest level since the beginning of August.

Equities were shaky, with a positive Wall Street open quickly fading following an hour or so of trade. Tech sector led the pullback, with the NASDAQ underperforming both the Dow Jones and S&P500.

The packed central bank calendar extends into the Thursday session with rate decisions due from the Norwegian, Turkish, Mexican and Swiss central banks. Speakers also include BoE's Bailey, ECB's Lane and no fewer than 8 Fed members including (again) Fed chair Powell, who this time testifies in front of the US Senate Banking Committee. Data of note includes the German IFO survey, weekly US jobless claims and new home sales.