Carney to testify before House of Lords

Broad based USD strength led USDCNH to a record high of 6.7885

Euro area “flash” composite PMIs surprised to the upside

Focus on BoE’s Carney who is due to testify to the House of Lords Economic Affairs Committee today

After the inclusion of offshore Renminbi in the International Monetary Fund’s basket of international reserve currencies in early October and China’s Golden Week holiday, broad based USD strength led USDCNH to a record high of 6.7885

Elsewhere in FX, EURUSD traded a stable range overnight, consolidating just above support levels of 1.0850. USDJPY rallied but stopped short of the 104.50 resistance level, led by USD strength across the board and firmer equity markets, despite comments from BoJ Kuroda on Friday inferring that easing might not be so easily forthcoming

In terms of data, Euro area “flash” composite PMIs surprised to the upside in October, posting the strongest print this year. The increase was driven primarily by a rebound in the services sector, while manufacturing output rose to a 10-month high

In the UK, CBI industrial trends data showed a sharp decline in October to -17, vs. consensus forecasts -5. Overnight, a YouGov/Citi inflation expectations survey showed the largest monthly jump in 1 year inflation expectations, at 2.5% vs 1.7% previously, driven by fears of higher import prices (Reuters)

Despite the media’s focus on Brexit, GBP ranges have consolidated with momentum stalling in EURGBP whilst GBPUSD has similarly traded in tight ranges. Our traders continue to favour a move to the downside in GBPUSD which, in their view, is likely to retest the October low of 1.2090 whilst a GBP rally is likely to be capped at resistance levels of 1.2275 and 1.2335

Focus for the UK turns to Q3 GDP data (Thursday) and Bank of England’s Mark Carney who speaks today at 15:35 at the House of Lords Economic Committee