Has PM Theresa May found the secret recipe for success? Make a complete fool of yourself and you will endear yourself to the people. A couple of months ago when she first broke out her dance moves it was awkward and hard the watch, when it happened again it was still awkward but you couldn’t turn away from what felt like a car crash and now UK’s PM has embraced that awkwardness as she “danced” onto the stage in yesterday’s Conservative party conference hoping to fire back at those looking to undermine her leadership. Yesterday’s speech gave us nothing new but reinforced May’s stance behind Chequers and with some helpful comments from Ireland on boarder issue. The pound managed to find some strength as a result and despite the weaker services PMI print earlier in the morning, EURGBP traded back towards the low end of its 2.5 months range, just above .8862.
It was a strong day for the USD yesterday, the USD index pressing to fresh six week highs and US yields pressed higher after what felt like the market suddenly realising US rates were on the rise and would continue on that path into next year. The USD is the best of a bad bunch at the moment with euro still finding itself exposed to Italy and Brexit, the pound vulnerable to any negative Brexit headline, and other G7 currencies just shadow boxing each other. US services data gave a bumper figure which helped sentiment posting 61.6 vs 58 expected which helped sentiment stateside with stocks closing higher, albeit off record levels.
There’s not too much to stoke any interest today data wise. The European calendar is fairly light and we’ll be looking to factory orders stateside. EURUSD took an interesting breakdown yesterday/overnight, trading as low as 1.1465 in the interbank market and levels not seen since mid-August. There was a quick flush once we broke below the 1.1500 yesterday which looked like some stop loss orders being triggered but progression lower has halted for now. 1.1465 now provides support with 1.1600 area likely to offer up resistance to a move higher.