Collinsonfx Daily Market Commentary

Markets await the outcome of the US/China negotiations, which resumed overnight and expectations are rising. President Trump announced that the Chinese were ready to deal and that he would meet the leader of the Chinese trade delegation, Vice Premier Liu on Friday. The hopes are for an interim agreement, which will halt the growing momentum of the trade war and allow sanctions to dissipate. Incremental staged agreement may now be on the way forward, as the President's bargaining position has deteriorated, due to the Washington politics. The prospect of a partial deal, has excited equity markets and bond yields are on the rise, reflecting the impact on the Fed's response.

The EUR rallied above 1.1000, boosted by the progress on the US/China trade front and the positive mood over a possible Brexit deal. Boris Johnson looks to have negotiated a solution to the Irish border question, with the Irish leader, which has been a massive obstruction to a Brexit deal. The GBP spiked back to 1.2435, as the key Brexit deadline fast approaches, 31^st of October. It appears that Johnson has learnt a lesson on negotiating, from his best buddy President Trump, Brinksmanship!

The progress in both Europe and the US has lifted spirits in the commodity exposed currencies. The AUD jumped back above 0.6750, while the NZD has regained 0.6300. Local NZ Manufacturing and Credit Card spending may impact the currency, at the margin, but the big picture is fluid.