EU is set to begin preparing for its post Brexit trade negotiations

Yesterday’s markets

13th October 2017

  • USD - PPI m/m: 0.4%
  • EUR - ECB President Draghi Speaks
  • USD - Crude Oil Inventories: -2.7M

The Pound erased it’s loses overnight as the EU announced it is to begin preparing for its post Brexit trade negotiations. A draft document outlined the 27 EU countries should being to discuss trade, with the talks opening to the UK in December. The document mentions although no ‘sufficient progress’ has been made, if the UK improves the terms of its withdrawal offer, the talks can turn to trade. It was also announced Chief Negotiator for the EU, Michel Barnier, may offer the UK the two-year transition period, UK Prime Theresa May spoke about in Florence.

Across the pond, the US PPI figure was released, posting as expected at 0.4%. The rise in producer prices were helped by the recent hurricanes hitting the South coast of America last month, as the storms caused the price of petrol to rise. With producers experience an increased rise in inflation from last month, the market will now be closely watching today's CPI figure to see if they provide further support for December rate rise from the Fed. However, if consumer inflation rises it is likely the rise will be treated as a temporary, as the data has been skewed by the storms.

Today’s markets

12th October 2017

  • USD - CPI m/m
  • USD - Core CPI m/m
  • USD - Retail Sales m/m

The US will be the focus of this afternoon, with the release of the core CPI and Retail Sales figures, expected to post 0.2% and 0.9%. The prelim University of Michigan Consumer Sentiment is set to be released, forecast to post 95.5. Today will end with two FOMC members; Charles Evans and Robert Kaplan, delivering speeches about the economy and monetary policy.