European markets reopen today with financial markets being rebooting by fresh liquidity. Yesterday saw the US dollar trade mixed against the G10 currencies, making the most ground against AUD and losing out to the Canadian dollar, with oil prices taking the market headlines. This week’s data calendar for the US dollar remains sparsely populated by top-tier releases, with the keynote coming on Friday with Q1’s advance GDP reading. Meanwhile, Donald Trump has walked back his previous statement and won’t nominate the extremely dovish Herman Cain for the Federal Reserve’s Open Market Committee. Elsewhere, Buckingham Palace is expected to announce Trump’s visit to the UK in early June.


British politics is back with a bang today after Parliament’s week-long Easter recess. It is reported that the Tory backbench 1922 committee will meet today to discuss slashing the grace period Conservative leaders receive after defeating a vote of no confidence within their own party. The potential shift from 12 months to 6 months could see May face a fresh challenge to be ousted as soon as June 12. Although all could be forgotten if the PM announces her retirement date this week. Meanwhile, Cabinet is expected to meet at 11:00 BST while President Trump’s visit to the UK is set to be announced today. In the background, cross-party talks will continue as Tory leaders try to find a majority within the House of Commons to put a Brexit deal in place prior to the European elections, thus enabling the UK to refrain from EU elections. The renewed political volatility may rejuvenate what has been a very lacklustre performance from sterling over the past week.


Most major markets remained closed around the Easter weekend on Friday and Monday, which gave EUR the opportunity to claw back some losses after disappointing manufacturing survey data send it lower on Thursday. Over the weekend the political situation in the bloc showed some signs of instability, with continued yellow vest protests in France and senior League officials in Italy saying the entire party is “sick and tired” with their left-wing coalition partner, the Five Star Movement. Today sees the Eurozone Consumer Confidence as the most important data release at 15:00 BST, with the German Ifo Business climate tomorrow shedding more light on how dependable the Thursday’s soft German manufacturing data really is.


The loonie managed to post a third of a percentage point gain against the US dollar yesterday, leading gains out of the G10 currencies. The move was predominantly driven by crude oil prices hitting a 6-month high after the Trump administration told five oil-importing countries; Japan, South Korea, Turkey, China and India, that they will now be subject to US sanctions if they continue to import oil from Iran. WTI prices climbed 2.66% on the news as it further entrenched the cut in OPEC supply, however, many expect this move to unwind prior to the OPEC meeting on the 26th of June. Meanwhile, the Bank of Canada will meet tomorrow to announce their latest policy decision. After a dismal Business Outlook release for Q1 last week, many expect the last dovish tones to be struck by Poloz and co in order to match the Fed step for step in their neutral stance.