US government shutdown and SPD vote hold both in check
I’d classify the SPD vote on advanced coalition talks with Merkel’s CSU clearly on the top spot, as the US govt shutdown is an ever returning saga and much more than filling newspapers and keeping politicians and broadcasters happy isn’t really affecting the USD today.
Let’s attribute a small part of the risk off JPY cross reaction to it today. But, what happens on Sunday should have a bigger impact, and that has clearly kept EURO from advancing today even if it had the feeling of. 600 SPD members will vote on Sunday, the leaders want the talks to move on to the next stage, but the base has been reluctant to openly go for the plain YES. In theory, with the main supportive Länder having the biggest number of voters, the balance should tip in favour of the advanced talks. But there is a Merkel fatigue that could play a part here and that’s where the risk lies.
A NO vote would put a lot at stake, not only will we see the risk of new elections, Merkel could get the boot. And the big dream to reform Europe again together with France will get a serious beating. The outcome is pretty binary I’d say. Equally for EURUSD on the open.
“YES” and I imagine the 1.2323 high would be revisited. A “NO” will put serious pressure on the 1.2155/70 support area I was talking about yesterday.
In the light of the risks this weekend I’m scaling back my risk to the strict minimal, avoiding EURO exposure. I do have tiny short USD vs JPY and CAD and small NZDCAD short. I’m a positive Nafta believer for Cad and it holds its ground for now.
BEWARE OF A GAP OPENING ON SUNDAY NIGHT DEAR READERS
- #Canada #Employment report preview. - November 5, 2021
- Rotation, ROTATION! - November 24, 2020
- $CNH living on hopium? Big week for the Yuan this. - January 13, 2020