Barnier Boosts GBP
More upbeat talk from the EU negotiator sent cable a cent higher to start the week and made the pound the top performer. The Swiss franc lagged as risk trades edged higher. UK employment data is due up shortly. The Premium video is now posted, setting up key trades for the big week, including Friday's pre-NFP trade, which is now 50 pips in the green.
Barnier said Monday a Brexit deal is realistic in six-eight weeks in a comment that immediately sent cable a cent higher to 1.3050. It had the makings of a quiet day beforehand as we wait for word from Trump on China and for NAFTA negotiations to restart Tuesday.
Looking ahead, the UK employment report is due at 0830 GMT (9:30 BST) and could be a major mover for the pound. Like the US report on Friday, jobs are less important than wages. Weekly earnings are expected up 2.5% y/y and 2.8% ex-bonus.
The question is what to do on a miss? The rally in the pound on Monday was impressive on what was a fairly routine comment from Barnier but listening to his interview, he was undoubtedly upbeat about the prospects for a deal.
Cable is coming off five straight months of declines but has shoed some signs of life since mid-August. If there's a soft reading on wages and the kneejerk in the pound is lower, it will be interesting to see if bids appear and the pair can recover. Conversely, if wages are strong it would be a confidence-builder for cable longs and an if the pair can climb close to 1.32
|Average Earnings Index (3m/y)|
|2.4%||2.4%||Sep 11 8:30|
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