GBP/USD: mounting political problems for PM May – Scotiabank Analysts at Scotiabank explained that there were no data reports today from the UK and little new to report overall to account for the GBP’s under-performance, however…
Key Quotes:
“Grounds for softness reside in the mounting political problems for PM May, with events undermining her authority just as the government restarts Brexit talks.”
“EU forecasts suggest that UK economic growth will slow in 2018 (to 1.3%, from 1.8% this year), even if the UK’s trade relationship with the EU remains unchanged.”
“We note that the market remains capped under key resistance in the 1.32 area and while immediate downside risks were not realized following yesterday’s minor double top formation, the pound has struggled to recover. Intraday price action is bearish and the pound continues to flirt with major, weekly support around 1.3095. Look to fade GBP rallies.”Read More →

Honda said it is inappropriate to reappoint Kuroda – UOB Analysts at UOB Group explained that the Bank of Japan (BOJ) ’s board member Funo said he doesn’t feel the need to change BOJ’s ETF purchases.
Key Quotes:
“Also, there is no truth to claims BOJ doesn’t buy ETFs when stock price rising or that BOJ is pushing up stock prices.”
“Potential BOJ Governor’s candidate Honda said it is inappropriate to reappoint Kuroda. He stressed that the BOJ needs new leadership and to adopt stronger policy steps to achieve 2% inflation target.”Read More →

Mexico: central bank keeps rates unchanged as expected, mentions NAFTA concerns Banxico kept the main rate at 7.0% as expected. Central bank mentions NAFTA as a source of uncertainty. MXN remained steady, in consolidation after October’s rally. As expected, the Bank of Mexico left the key interest rate unchanged at 7%. The last time it moved rates was a hike in June amid rising inflation. The CPI index peaked in August at 6.6% and Banxico officials estimate that it will continue to slowdown, reaching the 3% target toward the end of 2018.
The decision was unanimous. Some week ago, analysts were considering when the central bank could cut rates. The recent slide in the Mexican peso pushed those expectations far away. With inflation still high and all the uncertainty surrounding NAFTA negotiations rates are likely to continue at current levels.
It was the last meeting with Agustin Carstens as governor. He will leave on November 30 to head the Bank for International Settlements. The ne..Read More →

Senate tax plan meets $1.5 trillion federal deficit ceiling for tax legislation – Reuters Reuters is reporting the bullet points of the recently published U.S. Senate Republicans’ version of the tax cut bill.
Senate plan sets permanent 20-pct corporate tax rate with 1-year delay.
Senate plan meets $1.5 trillion federal deficit ceiling for tax legislation.
Senate plan keeps 7 individual tax brackets, sets 38.5-pct top earners rate, down from 39.6 pct.
Senate plan sets 10-pct tax rate for U.S. companies with IP in foreign low-tax jurisdictions.
Senate plan eliminates net operating loss carry-backs for businesses.
Senate plan fully ends individual deduction for state and local taxes, keeps business deduction.
Senate plan does not repeal federal estate tax on inheritances, but doubles exemptions.
Senate plan allows full expensing on business capital investments for five years.
Senate plan sets no special 'pass-through' tax rate, lets business owners deduct about 17.4 pct..Read More →

Crude oil futures continued to rise Thursday despite an analyst report tempering expectation for further supply cuts from OPEC.
Citigroup warns the meeting upcoming OPEC meeting will disappoint traders looking for a significant extension for the supply quota plan with Russia.
“There is an exuberance in the market about there being a done deal to extend through the end of 2018 and I think there's likely to be disappointment in that come Nov. 30,” Ed Morse of Citigroup told Bloomberg. “Our base case is that we do not get a full-year extension on Nov. 30.”
WTI light sweet crude oil rose 35 cents to $57.16 a barrel, as the bulls again took charge after yesterday's decline.
Oil has jumped to the highest in two years on speculation the global oil market will re-balance in the near future.Read More →

After initially move to the downside, treasuries recovered over the course of the trading day on Thursday before closing roughly flat.
Bond prices spent much of the afternoon bouncing back and forth across the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.331 percent.
The roughly flat close by treasuries came as traders digested reports regarding the Senate version of tax reform legislation.
The proposed bill has several key differences with the House version, including a delay in the implementation of the cut in the corporate tax rate.
The Senate bill still reduces the corporate tax rate to 20 percent from 35 percent, although the new rate does not take effect until 2019. The House bill would start the 20 percent rate next year.
The delay of the corporate tax cut in the Senate bill reflects an effort by Senators to partly offset the cost of the legislation.
The Senate bill als..Read More →