alk of ‘substantial issues’ between London and Brussels and divisions within the Tory Party on how to proceed with negotiations sent Sterling to a ten day low yesterday morning. An emergency meeting of the cabinet called for Monday was subsequently cancelled. Government officials remain at loggerheads over how to solve the key issue surrounding how to tackle the so-called Irish border backstop, intended to prevent a hard border between Northern and Republic of Ireland.

The release of a report from the FT that cited EU chief negotiator Michel Barnier as claiming that the main elements of an EU exit deal were ready briefly buoyed the UK currency. This optimism quickly fizzled out, however, possibly due to the fact that it merely confirms claims from Theresa May that an exit agreement was already ‘95%’ complete.

We now look ahead to the release of this morning’s UK labour report, expected to show earnings growth in Britain remained at a decade high above 3%. Investors will also place one eye on tomorrow morning’s inflation numbers for signs as to whether a weaker Pound is feeding through to higher domestic prices.

Euro sinks to sixteen month lows on Brexit, Federal Reserve bets

Monday proved to be another torrid session for the Euro, with uncertainty over Brexit and ongoing bets that the Federal Reserve will hike interest rates next month sending the EUR/USD rate to its lowest level since June 2017.

The aforementioned factors, combined with a general loss of appetite for risk and fears over Italy’s budget culminated in a near 5% drop in the currency cross since late-September alone. A recent bout of soft macroeconomic data out of the Euro-area has also far from helped. Downward revisions to either tomorrow’s updated third quarter GDP number or Thursday’s inflation print could mean that the downward move in the common currency has further to run.

With US markets closed on Monday due to Veterans Day, activity in the world’s largest economy was fairly limited yesterday and there were no macroeconomic releases. Attention will instead turn to announcements later in the week. Today we’ll have a couple of speeches from Federal Reserve members Brainard and Daly. Then on Wednesday, the October inflation numbers are expected to show that consumer price growth accelerated even further above the Fed’s target last month. Chair of the Federal Reserve Jerome Powell will also be speaking tomorrow.