Sterling Surge is Best in Months

By a comfortable distance, GBP was the outperformer Wednesday, with markets rushing to price in a more favourable Brexit outcome with talks due to formally resume Thursday, with the EU formally recognising UK sovereignty - a key tenet for future talks. GBP/USD rallied sharply, adding over 2 points to hit 1.3177 in the strongest session for the pair since late March. This opens the Sep highs as the longer-term target at 1.3482.

Dealmaking in the US also took focus, with market sentiment still clearly hinged on the will-they-won't-they nature of a COVID aid package. Reports in US outlets seem to be suggesting the most likely timeframe for a package will come after the election, with the lame duck period between election and inauguration being most commonly cited. The USD responded negatively, pressing the USD index to the lowest levels since early September.

Focus Thursday turns to weekly US jobless data and existing home sales as well as Eurozone consumer confidence. BoE's Bailey & Haldane, Fed's Barkin & Kaplan and ECB's Panetta are due to speak.