EUR Up on Riskon Sentiment, EU Budget Settlement in Focus

Note  The table above is updated before publication with the latest consensus forecasts. However, the text charts are prepared ahead of time. Therefore there can be discrepancies between the forecasts given in the table above and in the text charts. 

Rates as of 0500 GMT

Market Recap

It was the day of the euro! Not only did EURUSD break the notorious 1.20 barrier, but also EUR gained on all of the major cross rates as well. 

There were a number of reasons behind the surge.

Although many of the manufacturing purchasing managers indices PMIs showed some deceleration, the majority were still in expansionary territory, suggesting that the global economy continues to recover. We have to wait to see Thursdays servicesector PMIs before we can be fully confident however as the service sector was hit harder by the pandemic. 

The Brexit talks seem to be making progress, or at least havent broken up yet. No news is good news as far as the breakthrough or break up talks are concerned. There were reports that the two sides had entered tunnel negotiations, in which the negotiators are insulated from leaks or media scrutiny, but neither side would confirm this. 

I have to say though that the news from todays Financial Times isnt particularly optimistic. The FT says that chief EU negotiator Michel Barnier will brief EU national governments on Brexit talks on Wednesday morning amid concerns in some capitals that the European Commission is poised to give away too much ground…

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