1. ##  Market Review - Fundamental Perspective - 05 Oct 2018 

>      * **Most global equities came under pressure due to surging US bond yields**
>      * **GBPUSD rallied on positive Brexit headlines yesterday and this morning**
>      * **Focus on the US Labour market report at 13.30 BST today**
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>  Most global equities came under pressure yesterday as US bond yields surged to 7-year highs. The Bloomberg USD spot index traded slightly lower with the greenback advancing against most emerging market currencies but falling significantly vs GBP and JPY  
>  GBPUSD traded higher yesterday amid positive Brexit rhetoric, including EU’s Tusk indicating he is serious about finalizing a Brexit deal (Bloomberg). Further headlines this morning that the Brexit Withdrawal deal is “very close” to being concluded prompted GBPUSD to rally  
>  Today’s focus is on the US Labour market report at 13.30 BST. After ADP employment figures beat expectations earlier this week, today’s data will be closely watched  
>  Barclays Research expect nonfarm payrolls to rise by 200k, the unemployment rate to decline by 0.1%, to 2.8%, and average hourly earnings to rise 0.2% m/m  
>  EURUSD saw a squeeze up to a high of 1.1543 yesterday ahead of the data release  
>  Looking ahead, Brazil will hold general elections on 7th October. Barclays Research believe “as the election turns into a referendum on the Workers’ Party (PT), strategic voting can still influence results this Sunday”  
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  2. ##  Market Review - Fundamental Perspective - 08 Oct 2018 

>      * **Limited reaction to mixed US employment data on Friday**
>      * **GBP finished the week with a bid tone following Conservative party conference**
>      * **Jair Bolsonaro won more votes than expected in first round of Brazilian elections**
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>  There was limited market reaction to mixed US employment data on Friday. NFPs disappointed at +134k vs c.+185k but this was countered by a large upward revision to August data (+270k from +201k previously) and wage growth was in line at +0.3% m/m  
>  Focus now turns to US CPI data (Thu). Above-target US inflation should support recent increases in US rates, and Fed rhetoric has indicated a commitment to further tightening that remains underpriced by rates markets  
>  Last week’s Conservative party conference, with PM May’s closing speech reiterating her hard stance on Brexit and intention to end austerity, helped dampen questions regarding a leadership challenge  
>  Barclays Research...” see this positive momentum carrying forward this week given the negotiation timeline, and expect continued headlines as Brexit Secretary Dominic Raab visits Brussels ahead of the upcoming EU Summit (which begins on the evening of 17 October)”  
>  Recent gains in oil prices and US interest rates are likely to continue to weigh on the assets of economies dependant on energy imports and global capital. Higher oil prices are particularly problematic for large net oil importers in EM with current  deficits or countries where energy represents a large portion of CPI baskets. Vulnerable currencies include PHP, INR, ZAR and TRY  
>  Investor favourite, Jair Bolsonaro, led the Brazilian first round presidential election with more votes than polls forecasted. Markets are likely to take the result positively, as it indicates the second round on October 28 might not be as closely fought as previously thought  
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  3. ##  Market Review - Fundamental Perspective - 09 Oct 2018 

>      * **US Treasury yields hit a fresh seven-year high**
>      * **Italian budget woes continue to weigh on the Euro**
>      * **The IMF cut its global growth forecasts amid trade tensions and EM woes**
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>  Ten-year US Treasury yields hit a fresh seven-year high as they resumed trading after a holiday, posing a fresh test of investor appetite for riskier assets. Stocks in Shanghai were little changed after the biggest sell-off in more than three months, as investors weighed increasingly attractive valuations against deepening US-China tensions  
>  US Secretary of State Michael Pompeo met with Chinese officials in Beijing yesterday, where talks escalated after Chinese Foreign Minister Wang Yi accused the US of “escalating trade disputes, interfering on Taiwan and meddling in the country’s domestic affairs” (Bloomberg)  
>  Italian budget woes are continuing to weigh on the Euro, with BTP/ bund spreads widening further yesterday. Focus will continue to be on Italy with Finance Minister, Tria, set to speak to lawmakers on the budget this morning  
>  EURUSD briefly tested through last week’s lows yesterday. Intraday support is building around 1.1460 but if we break through this level there is little in the way of meaningful downside levels until the key 1.1300 area  
>  Overnight, the IMF cut its growth forecast for the global economy for the first time in more than two years, blaming trade tensions and stresses in emerging markets. The fund projected a global expansion of 3.7% this year and next, down from the 3.9% projected 3 months ago  
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  4. ##  Market Review - Fundamental Perspective - 10 Oct 2018 

>      * **US equities saw a volatile session yesterday after eight-week lows on Monday**
>      * **US Treasury yields stalled weighing on the USD**
>      * **GBP received support from positive Brexit headlines**
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>  US equities saw a mixed and volatile performance yesterday, while their Asian counterparts traded broadly flat overnight. In FX, the Bloomberg USD Spot Index traded higher in the UK session, but reversed all of the initial gains in US hours as the advance in Treasury yields stalled ahead of Thursday’s report on US Consumer prices (Bloomberg)  
>  GBPUSD traded higher yesterday amid more positive Brexit sentiment, as EU’s Brexit minister Raab expressed confidence that Britain and the EU would make progress at the October summit next week, and urged the EU to ‘meet London halfway’ on the most difficult areas (Reuters)  
>  It was also reported that a group of 30-40 Labour MPs were prepared to defy Corbyn and back the Chequers deal (The Times)  
>  Our traders currently see GBPUSD support at 1.3020 while resistance comes in at 1.3215. EURGBP support comes in at 0.8690-0.8700 while resistance is at 0.8790 and 0.8838  
>  Yesterday, focus was also on Italy’s Finance Minister Tria’s speech who called for ‘constructive dialogue’ with EU over the Italian budget, and said that ‘Italy will do whatever is necessary to restore calm if market turbulence turns into a financial crisis.’ (Reuters)  
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  5. ##  Market Review - Fundamental Perspective - 11 Oct 2018 

>      * **Global equities see biggest sell-off since February**
>      * **GBP continues to be driven by Brexit headlines in lead up to EU Summit next week**
>      * **Markets will watch for release of US CPI today at 13:30 BST**
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>  Global equities were trading in the red yesterday and overnight, with US equities suffering their worst day in months, and Japan’s Nikkei down 3.9%. Treasuries, which helped trigger the stock decline when 10-year yields hit the highest since 2011, held gains posted Wednesday  
>  In FX, the Bloomberg USD Spot index traded lower, reaching one-week lows against all G10 currencies. The USD was kept under pressure by Trump’s criticism of the Fed, for “going loco” with respect to its interest-rate increases this year (Bloomberg)  
>  Sterling made gains vs EUR and USD yesterday on positive Brexit comments. EU Chief Brexit negotiator Barnier said on Wednesday that a deal with the U.K. is within reach, but he cautioned that obstacles remain (Bloomberg)  
>  Headlines overnight that the DUP is ‘prepared to vote against budget’ if their Irish Border red lines are not upheld (The Times) caused limited market reaction as focus has turned to the broader market risk off sentiment  
>  Today, PM May’s meeting with senior cabinet members to discuss remaining in customs union until trade deal is agreed, could generate further headlines  
>  Elsewhere, TRY made gains yesterday in anticipation of US Pastor Brunson’s release. It is expected that he will be released at his hearing on Friday, which investors hope will pave the way to improved future relations with the US (Reuters). President Erdogan said yesterday that he would ‘abide by whatever decision the judiciary makes’  
>  Focus today turns to US CPI, which will likely set the tone for USD sentiment and risk. Barclays Research expect headline CPI to have increased 0.2% m/m (2.4% y/y), driven by energy prices and core CPI to have increased 0.2% m/m (2.3% y/y).  
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  6. ##  Market Review - Fundamental Perspective - 12 Oct 2018 

>      * **Asian stocks and US equityfutures rebounded overnight  
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>      * **Reports suggest that US-Sino trade tensions are easing  
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>      * **GBPUSD held up well despite negative political headlines**  
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>  Global equities continued to sell-off yesterday in what was a very volatile session. However, Asian stocks and US equity futures rebounded overnight on hopes that the US will not blame China for currency manipulation (Bloomberg). The yield on 10-year US Treasuries also rebounded overnight to 3.1745 at time of writing  
>  In FX, the Bloomberg USD Spot index traded lower amid a small downside miss in US CPI  
>  In a slight de-escalation of the Sino-US trade war, Bloomberg reported overnight that the US Treasury Department’s staff have advised Treasury Secretary Steven Mnuchin that China ‘isn’t manipulating the yuan’ whilst President Trump has publically pressured Mnuchin to declare China a currency manipulator  
>  Sterling made gains yesterday amid anticipation of a deal being agreed within the next week. However, even if a deal is agreed, the difficulty Prime Minister May will face is getting it through the House of Commons. Overnight, Arlene Foster, leader of the DUP, said that she is ‘determined not to agree to the EUs backstop plan to keep the Irish Border open after Brexit’ (Bloomberg)  
>  In EM, TRY has rallied this week, in anticipation of Pastor Brunson’s release. He is reportedly in court at time of writing (Bloomberg)

  7. ##  Market Review - Fundamental Perspective - 15 Oct 2018 

>      * **Higher US rates and US-Sino tensions weighed significantly on equities last week**
>      * **GBPUSD came under pressure on negative Brexit headlines**
>      * **Focus on the EU Summit on 18th October**
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>  Higher US rates and ongoing US-China tensions have weighed heavily on risk sentiment leading to a sharp decline in global equities last week. In FX, the Bloomberg USD Spot Index fell over the course of the week amid concerns that the Fed might be moving too fast  
>  Brent prices approached $82/ barrel overnight on concerns that US-Saudi tension could worsen over the disappearance of a Saudi journalist (Reuters)  
>  GBPUSD fell by over 1% on Friday amid uncertainties surrounding the upcoming Brexit deadlines, and broke below 1.31 at one point overnight after EU‘s Barnier confirmed a stalemate of Brexit negotiations on Sunday (Bloomberg). While there are several domestic data releases this week, focus is on the EU summit on Thursday, 18th October and any Brexit-related headlines  
>  Barclays Research expect “EU leaders to demonstrate concrete progress this week and finalize the agreement next month at an extraordinary EU summit, leading to some further GBP gains versus EUR and USD”   
>  In Germany, Bavarian regional elections yesterday saw Merkel’s sister party drop to historical lows which could bring up a new round of coalition turbulences (Bloomberg)  
>  In EM news, USDTRY saw a volatile session on Friday as Pastor Brunson’s trial ended and he was released. Headlines from over the weekend were positive suggesting a potential easing of US-Turkey tensions (Bloomberg) which prompted USDTRY to drop below 5.83 this morning  
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  8. ##  Market Review - Fundamental Perspective - 16 Oct 2018 

>      * **US equities continued to trade lower yesterday adding to last week’s losses**
>      * **GBPUSD rebounded yesterday amid some conciliatory Brexit rhetoric in the afternoon**
>      * **Markets watch UK employment data at 09.30 BST, but main focus remains on Brexit developments**
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>  US equities closed in the red yesterday, in particular dragged down by the technology sector. In Asia, the Nikkei rebounded amid signs that JPY is struggling to rally, however Chinese stocks continued to trade lower. Risk sentiment was impacted by the worsening US-Saudi Arabia tensions following the disappearance of a Saudi journalist in Turkey earlier this month (Reuters)  
>  In FX, the Bloomberg USD Spot Index dropped throughout the course of yesterday. The notable underperformer overnight was MXN on reports that the US may impose quotas on Mexico’s steel exports (Reuters). Elsewhere, NZDUSD outperformed after New Zealand inflation beat expectations  
>  GBPUSD rose throughout yesterday after having hit a low of 1.3082 amid a stalemate over the Brexit negotiations. PM May and France’s Macron struck a conciliatory tone yesterday but upcoming Brexit negotiations will likely lead to further headline risk  
>  Besides Brexit developments, focus is also on domestic employment data at 09.30 BST  
>  Our traders see GBPUSD resistance at 1.3250 and support at 1.3080. EURGBP finds resistance at 0.8836, while support comes in at 0.8775 ahead of 0.8725  
>  Today the US Treasury’s semiannual currency report is released which will reveal whether Washington labeled Beijing as a currency manipulator  
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  9. ##  Market Review - Fundamental Perspective - 17 Oct 2018 

>      * **Global equities rallied yesterday on strong corporate earnings in the US**
>      * **GBPUSD rose yesterday despite the absence of positive Brexit news**
>      * **Today’s focus is on the EU October Summit and FOMC minutes**
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>  Global equities rallied across the board yesterday amid strong corporate earnings in the US, most notably from Morgan Stanley, Goldman Sachs, Johnson & Johnson and Netflix. In FX, the recovery in risk sentiment lead to reduced demand for safe havens and prompted JPY to fall vs the USD  
>  The Bloomberg USD Spot Index rose overnight reversing its two-day losing streak ahead of today’s FOMC minutes which are released at 19.00 BST  
>  GBPUSD traded with a strong bid tone yesterday despite the absence of any positive Brexit progress. In data, the UK’s August Labour Report showed that wages continue to accelerate, driven by robust momentum in public sector pay. Unemployment stayed at its low of 4% as expected  
>  Market focus is now on the EU October Summit which takes place today and tomorrow. Overnight comments by Luxembourg’s Foreign Minister Asselborn were rather negative implying that a Brexit deal at this summit is highly unlikely (Bloomberg  
>  Senate Majority Leader McConnell reportedly said that the newly negotiated United States-Mexico-Canada Agreement (USMCA) will not get a vote in Congress this year because of the various steps that will have to be gone through. Waiting until next year for Congress to approve the measure opens the possibility for Democrats to seek concessions from the White House if the party wins a majority in the House in midterm elections on 6th November (Bloomberg)  
>  Despite this, CAD traded bid yesterday amid a broader rally in risk and oil continuing higher  
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  10. ##  Market Review - Fundamental Perspective - 18 Oct 2018 

>      * **Global equities declined throughout yesterday and overnight**
>      * **Hawkish FOMC Minutes prompted US Treasury yields and the USD to rise**
>      * **GBPUSD traded lower yesterday amid general USD strength and weak UK inflation data**
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>  Global equities traded lower yesterday and overnight. Focus was on the release of the FOMC Minutes which struck a hawkish tone leading US treasury 10-year yields to rise to 3.21% and the Bloomberg USD Spot Index to rally. EURUSD broke below 1.1500 this morning  
>  AUDUSD outperformed overnight after unemployment fell to its lowest level in six years  
>  The minutes from the September FOMC meeting suggested that economic conditions were “strong” overall and committee members were unanimously in support of continuing with their plan of gradual policy normalization, with an eye on ongoing developments with the data  
>  Barclays Research sees “nothing in the minutes that would affect our call of one additional rate hike this year, followed by four more quarterly hikes next year”  
>  GBPUSD declined throughout yesterday amid broad-based USD strength and weak UK inflation data. With regards to the EU October Summit, reports suggest that not enough progress has been made to allow for a summit in November (Bloomberg). Headlines also imply that there may be an extension of the transition period (BBC); markets will watch any further news closely  
>  In data, September UK inflation declined y/y, confirming Barclays Research’s view that the strength in the August data was largely erratic and temporary  
>  The US Treasury FX report refrained from naming China a currency manipulator as was widely expected and keeps the same six countries on its watch list, namely China, Germany, India, Japan, South Korea and Switzerland  
>  Following this report, the PBOC weakened its fixing by 0.25% (Bloomberg), which prompted USDCNY to hit its highest level since January-17  
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