Sterling extends its gains

Sterling has extended its gains against both the euro and the dollar, as fears of a no deal Brexit at the end of October have receded somewhat, with the pound trading at around 89.5p and $1.23 respectively this morning (compared to lows of 93p and sub $1.20 not that long ago at all). The euro has recovered a little ground against the dollar over the past few sessions to trade at around $1.1050, as the market pares back its expectations for the size of the stimulus the ECB might deliver at next Thursday’s monetary policy meeting

On becoming Prime Minister, Boris Johnson said the UK would leave the EU on October 31st with or without a deal. However, Parliament this week passed legislation effectively preventing a no  deal departure then and also withheld support for a snap general election. There’s still plenty of talk though about a possible election and when might one be held (e.g. before or after October 31st)

Bond yields in the core markets rose yesterday following the release of some stronger than expected US economic data in particular, including a notable rebound in the ISM index of activity in the non-manufacturing sector (i.e. mainly services) of the economy

The key data release today is the August employment report in the US, with the consensus expecting an increase in ‘payrolls’ of 160k and the unemployment rate to remain at 3.7%

Other data due include a second estimate of Euro Area GDP growth in Q2