MARKET DEVELOPMENT – GBP[1] JUMPS ON CUSTOM UNION REPORT
GBP: The Pound jumped through 1.3000 to hit highs of 1.3044 following UK press reports that the EU may offer a UK-wide custom union as a way around the Irish backstop issue, but it would have to be negotiated beyond the Withdrawal Agreement as a separate treaty. Consequently, this has provided a slight boost to Brexit optimism, however, as has usually been the case in recent weeks, optimism and pessimism has typically been faded.
JPY: US equity futures are firmly in the red with the Dow Jones[2] shedding over 400 points following the negative sentiment in European and Asian equity markets. In turn, the Japanese Yen[3] has benefitted from safe haven flow with the currency eying 112.00 to the downside against the US Dollar[4].
EUR[5]: Italian budget concerns persist with the European commission announcing that the Italian government will have to resubmit their budget. The Euro had been relatively unchanged following these comments, despite the uptick in Italian bond yields.
DailyFX Economic Calendar[6]: Tuesday, October 23, 2018 – North American Releases
DailyFX Webinar Calendar[7]:Tuesday, October 23, 2018
IG Client Sentiment[8]: USDJPY[9] Chart of the Day
USDJPY: Data shows 53.4% of traders are net-long with the ratio of traders long to short at 1.15 to 1. In fact, traders have remained net-long since Oct 15 when USDJPY traded near 112.308; price has moved 0.2% higher since then. The number of traders net-long is 11.6% higher than yesterday and 10.3% higher from last week, while the number
