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There have been some attempts to support risk markets in Asia, after China was out communicating a message that it would be prepared to take measures to prop sentiment. However, with monetary policy tools so exhausted, with inflation a risk that could emerge in the months ahead, and with US China trade talks not moving along as productively as many would like to see, we suspect there could be more liquidation in the global equities market. http://bit.ly/2Wg53xM

Looking at the Friday calendar, key standouts come in the form of German and Eurozone manufacturing PMIs, Canada retail sales and CPI, and US existing home sales and manufacturing data. http://bit.ly/2FndrET

Interestingly enough, stocks were not able to hold onto initial attempts to the topside in the aftermath of the Fed decision, with investors perhaps more concerned about the Fed’s added caution, than encouraged by the extra cushion of accommodation. It’s too early to tell at this point and we will need to see if there is continued follow through from these initial moves in the sessions ahead. As far as today goes, attention will shift back over to the UK, with the Bank of England decision due, along with an EU Summit, where a short Article 50 extension is expected. http://bit.ly/2Jwce3p

The big focus on Wednesday will be the Fed decision late in the day, with not much else going on ahead of the event risk. The only notable standouts are PPI reads out of Germany and the UK and UK CBI trends. http://bit.ly/2TiJP0r

At the moment, it looks like we’ll see Prime Minister May put in that official request for an Article 50 extension, with the chatter around a 9-12 month extension request. The EU is expected to grant an extension, though it remains uncertain just how long the grant will be and what contingencies are attached to different options that might be presented. http://bit.ly/2TV07Rp

Most of the attention for the day is likely to be on Brexit, to see if there will be a third Brexit deal vote on Tuesday. We’ll also start seeing some of that central bank risk positioning as we inch closer to Wednesday’s Fed decision, where a hold is expected with an accompanying downward revision to the dot plot. http://bit.ly/2HpSD37

The Pound has emerged as the strongest currency this week into Friday. The relative strength has come from a massive reduction in risk that had been associated with disorderly no-deal Brexit this month. While there continues to be uncertainty around the event, this alternative uncertainty, involving a delay in the exit date, is an uncertainty that should be far less worrying and one that brings with it hope for a palatable resolution. http://bit.ly/2JfGY8R

As far as Brexit goes, the next logical step is a vote in favour of delaying Brexit until June end, with this vote happening later today. There is still the possibility that Theresa May tries to make some more headway to get a deal pushed through, but if this doesn’t happen, we’ll need to see unanimous support from all EU member states to grant the delay for a period of time that will be up for debate. http://bit.ly/2TCzHop

Risk off flow sets in as reality of tougher road on US-China trade talks sets in. Over in the UK, attention shifts to today’s 19GMT vote to oppose no-deal Brexit. The broad consensus is that the no-deal Brexit option will be rejected. This should take us into what has been the anticipated next course, which is a request for a delay of the Brexit date. http://bit.ly/2TDGXQH

The market has been feeling better about the Pound outlook after the UK and EU agreed to legally binding changes to the Irish backstop. The new deal will be put in front of UK parliament and we will find out soon enough if this is the deal that will finally go through. On the economic calendar, we get first tier UK and US data. http://bit.ly/2T0276z

The Pound has been the clear winner on the week and the source of the relative strength has been abundantly clear, with those odds for a disorderly no-deal Brexit at the end of this month having been significantly reduced. The market was feeling really good about US-China trade deal prospects early on in the week, which helped to drive US equities to fresh heights in 2019, though there was plenty of cold water thrown on all the positivity, forcing investors to reconsider bullish bets. http://bit.ly/2UgNc9q

The market will continue to monitor developments on the Brexit front, while also looking to the second day of Fed Chair Powell testimony, after day one failed to produce any surprises. Risk markets haven’t feeling as good after a nice start to the week which had US equities jumping to fresh yearly highs as they extended their massive recovery off the December low. http://bit.ly/2VqIYwi

Theresa May is reportedly considering ruling out a no deal scenario and delaying the March Brexit date, while Labour leader Jeremy Corbyn is backing a second referendum. Both of these developments take the Pound further away from what would have been a catastrophic walking off a cliff event, and it comes as no surprise to see the UK currency continuing to benefit from such news. http://bit.ly/2SnAFzi

There was some positive weekend speculation Labour was very close to backing a second referendum, while cabinet member Gove said the PM was close to securing backstop concessions. At the same time, The Times has reported the PM was told to rule out no-deal, or face ministerial resignations, after it was revealed that she would be waiting until 17 days before the Brexit date for the vote on her revised exit plan. http://bit.ly/2GJYuzI

Progress on US-China trade talks has helped to push equities higher, with investors shrugging off a Fed Minutes that produced very little in the way of surprises. Overall, not much reaction in FX, with most markets still confined to familiar ranges. http://bit.ly/2twKZLt

The Pound has performed well this week, getting a boost from a solid batch of UK employment data and renewed optimism around the prospect of Theresa May making some progress in her efforts to secure an acceptable Brexit deal. As far as today’s calendar goes, German producer prices have already come in hot and looking ahead, we get Eurozone consumer confidence and the Fed Minutes later in the day. http://bit.ly/2SamRrO

The market will get back to fuller form today, with the US market returning from the long weekend holiday. As far as today’s calendar goes, the key standouts come in the form of UK employment, Eurozone construction output, German and Eurozone ZEW surveys, the New Zealand GDT auction and US NAHB housing. US-China trade talk updates and Theresa May’s progress, or lack thereof on Brexit, will also be monitored. http://bit.ly/2GyWP05