Summary:

• European stock markets remain depressed, and the US futures point to a gloomy opening alike
• British pound likes latest comments regarding Brexit, euro jumps higher on some ECB leaks
• Commodities stay on the back foot, Norwegian krone loses steam along with oil prices

The beginning to the new trading week has not been successful for equity investors thus far as major European stock markets keep falling whereas the US futures point to a grim start of trading. Taking a look into the German stock exchange one may spot that Henkel has been the largest culprit of a broader sell-off, shares got a blow following the company’s report suggesting some sales woes during the first quarter on the back of the logistics issue in North America. As of 1pm BST the largest losses have been made in Germany and the United Kingdom despite upbeat revelations concerning Brexit. The DE30 is falling 0.85% trimming some of its losses whilst the FTSE100 (UK100) is falling as much as 1.3%.

As far as currencies are concerned, the British pound is decisively the largest winner of today’s session being up over 0.7% due to some leaks on the Irish border thread coming from the European Union. According to them some progress on the topic has been made, however, the final agreement has yet to be hammered out. The British Sky has reported that a transition period is likely to be agreed today with December 2020 being set as a cut-off date. Thanks to the agreement the UK is to be allowed to agree trade deals on specific conditions. The GBP is currently the best currency in the G10 basket and kicks off the week with a bumpy ride as we’ve pointed out earlier in our weekly calendar. The shared currency has also popped higher following some leaks coming from the ECB via Reuturs as the central bank is reportedly comfortable with market forecasts for a rate hike by the middle of the next year and that QE will halt by year-end as even most dovish members are to back up QE unwinding.

Looking back to the Asian session it’s worth recalling the Bank of Japan summary of opinions from its March meeting where the bottom line is that persistent monetary easing appears to be still necessary. Beyond remarks we already well knew the BoJ expressed some concerns with regard to the ex-change rate suggesting that if yen appreciates and stock declines become prolonged, it could adversely influence both CAPEX and consumption.

The entire cryptocurrency block had quite a tumultuous weekend as traders and other crypto pundits await the G20 summit kicking off in Argentina today. Let us remind that there were some revelations that the summit could be an important event for cryptocurrencies as members are expected to talk about implementation of a common regulatory framework used around the world.

We have finally seen some live on the FX market, not least  because of geopolitics and this trend could well be continued this week as investors will brace themselves for the first FOMC under Jerome Powell. We elaborate on the FOMC meeting’s impact on the US dollar and allude to some commodities from a positioning point of view.