Markets are expected to be edgy as the focus now shifts towards the U.S. congressional midterm elections due on Tuesday.
The overnight Brexit deal rhetoric prompted a bullish opening gap in the GBP/USD pair. However, the opening jump was quickly reversed on fresh conflicting Brexit headlines that cited a Brexit deal is far from certain, as the uncertainty around the Irish border issue still looms. Meanwhile, the USD/JPY traded modestly flat around the 113.25 level, as the Yen was undermined by the BoJ’s Governor Kuroda’s comments on the monetary policy and inflation outlook. The EUR/USD traded cautiously below the 1.14 handle.
A relatively light EUR macro calendar lies ahead, with the UK services PMI dropping in at 09:30 GMT and at the same time, the Eurozone Sentix investor confidence data is due. The NA session also appears quiet, as only the US ISM non-manufacturing PMI report will be closely eyed. The macro releases will play a second role to the Brexit-related headlines and US mid-term elections anxiety, which will remain the main market drivers in the coming days.
Energy markets were keeping oil price propped up on expectations that the US sanctions on Iran would constrained the global supply, but the US, Saudi Arabia, and Russia are all producing crude at a record pace, and broader oil prices are now facing a risk of getting flooded by untamed oversupply. In addition, a last-minute waiver system being offered by the US to allow allies to continue importing Iranian oil, lessening the blow of sanctions. As a result, the Oil prices came under pressure on Monday, with Crude currently trading close to $63.00 per barrel.
Gold prices has been trading flat over $1,230, amid solid festive demand from India, the world’s top buyer, even after the dollar was pushed higher following the release of a stronger-than-expected U.S. jobs report for October. The U.S. mid-term elections, the Federal Reserve’s November meeting due later this week and concerns = over the US-China trade deal are expected to affect the yellow metal.