US ISM Manufacturing Data On Watch

US Manufacturing Data Due

The US dollar has had a subdued start to the week with the index trading roughly flat over the European morning on Monday. The main focus today will be the release of the ISM Manufacturing data for November. If the index is seen to have remained in contractionary territory last month, this could be firmly negative for USD. The USD index trades 98.27 last, having recovered some of the declines posted late on Friday.

Lagarde In Focus

EURUSD is still capped by the 1.1024 level today, with price trading 1.1014 last. This level continues to be a key pivot for the pair which has been sold over the European morning so far on Monday. ECB’s Lagarde speaks later today and traders will be keen to receive further insight into her views on the Eurozone economy and monetary policy outlook.

GBP Under Pressure

GBPUSD has started the week on a soft footing, slipping down to 1.2908 as of writing. The UK elections are now less than two weeks out. While polls continue to show the Conservative party in the lead, the margin between it and the Labour party has reduced, keeping uncertainty elevated. The prospect of another hung parliament and another coalition government means that chances of Brexit being extended once again will likely increase.

SPX500 Hits New Record Highs

Risk assets have started the week on a firm footing. The SPX500 has surged higher to 3157.63, recording fresh, record highs. The moves come despite reports that the US/China trade deal has stalled over the US signing of a bill supporting the Hong Kong protestors. While the SPX has softened a little from the morning high, for now, it seems that traders are shrugging off the reports and focusing on upside.

JPY & Gold Lower

Safe-havens have been lower today. Both the Japanese Yen and gold have fallen against the dollar in light of the continued surge higher in equities prices. XAUUSD trades 1456.51 last, sitting just above last week’s lows for now. USDJPY trades 109.53 last, sitting just off the overnight highs. Incoming headlines regarding the US/China trade talks will be closely watched this week and will be a key driver of risk flows.

Oil Bounces off 55

Oil prices have been firmly higher over the European session so far on Monday with crude trading up to 56.51 last. This comes following a strong recovery off the 55 level tested late last week. Despite reports of difficulties within the talks, it seems that for now, traders are remaining optimistic over a US/China trade deal. This optimism is keeping crude prices bid this morning. However, on the back of another bearish report from the EIA last week, the risk of a move sub-55 remains high.

Crude Helps CAD

USDCAD has had a volatile start to the week with price making moves in both directions over the European morning on Monday. The recovery in crude prices is helping boost CAD here. This is seeing USDCAD softening from earlier gains, trading 1.2385 last.

Aussie On The Rise

AUDUSD is pushing firmly higher today with price having broken back above the .6779 level to trade .6788 last. The prospect of a US/China trade deal remains the key driver for AUD. The RBA recently ruled out using QE in the near term. This has taken some of the bearish pressure of the Aussie, allowing room for further upside here.