Aud/Usd

[GreenApple]

The ambassador-level talks rarely result in immediate headlines, but with other forums for Russia-West cooperation not active, they can make a difference.

German retail sales surprisingly fell 2.6 percent year-on-year last month, data showed this morning, confounding expectations of a modest rise.

[GreenApple]

The implication of Donald Trump's move to pull the U.S. out of the 1987 INF missiles treaty will loom large, as will NATO's launch last week of its biggest military exercise since the Cold War, a 31-country event stretching from the Baltic Sea to Iceland - and which came after Russia held a huge military drill last month.

[GreenApple]

After initially being perceived as frosty towards business, May has sought to win its backing for her compromise plan to avoid a no-deal Brexit as she takes on critics in her own party. Separately, foreign secretary Jeremy Hunt is due to outline a vision of Britain's diplomatic role in the post-Brexit world in a speech tonight.

[GreenApple]

After a UK budget this week which the Confederation of British Industry said contained "more treats than tricks for business", PM Theresa May will follow up today by meeting around 120 chief executives and international investors to discuss Brexit and the economy.

[GreenApple]

There are signs of growing stress in options markets for trading sterling against the euro, too.

Three-month and six-month risk reversals headed this month towards levels seen in August, when bearish sentiment on the pound was at its highest since October 2016.

[GreenApple]

One-month risk reversals, however, are only at their highest levels since June 2017, suggesting investors are not as panicked about the very short-term outlook for the pound as they are over the outlook into 2019.

[GreenApple]

According to FENICS data, three and six-month risk reversals this month hit their highest level since July 2016, shortly after the June referendum vote. That indicates greater demand for put (right to sell sterling) options versus calls (right to buy).

[GreenApple]

“So it’s quite plausible that we go into Christmas with a first vote failed and the focus of the second attempt being something to look forward into the new year. That’s not great,” he said, adding that he expected a deal to pass through parliament eventually.

[GreenApple]

The arithmetic did not favor May getting an agreement through parliament, he said. A failure at the first attempt would spark weeks of “acrimonious posturing, brinkmanship, threats, people worrying about a leadership contest, general election, Jeremy Corbyn” just as liquidity thinned at year-end, he added. Corbyn is leader of the opposition Labour Party.

[GreenApple]

And a parliamentary rejection could plunge Britain into a sudden, disruptive exit, reaping havoc on the economy as the UK fell back on World Trade Organization rules for trade with the EU, its largest trading partner.