MPs delay deal vote
The pound was under pressure from the outset on Monday morning after British MP’s delayed a vote on Boris Johnson’s Brexit deal by introducing an amendment to the Benn Act which would prevent an “accidental” no-deal exit from Europe. As a result PM Johnson is obliged to request a deadline extension past October 31, with rumours suggest end-January is the next stop. He reportedly sent an unsigned request for an extension to Europe.
The pound fell in Asian trading, snapping a four-day rising streak, though losses were limited to less than 1% as, even though a deal is likely, we are apparently closer to a deal than any time in the past three-plus years. GBP/USD is now down 0.55% at 1.2911 after reaching 1.2991 on Thursday, the highest since May 13. The 200-day moving average is now at 1.2716.
GBP/USD Daily Chart
Equities drift higher
Aside from the GBP action, it was a mundane start to trading this week. In a common theme in recent days, US equity indices travelled in the opposite direction to the previous NY session, this time rising between 0.21% and 0.31% with no specific news drivers. The rest of the Asian equities followed suit, with the Japan225 index gaining 0.21%, despite weak exports numbers, the HongKong33 rose 0.55% while China shares out-performed with gains of 0.84%.
Japan exports down more than expected
Further evidence of the global slowdown came from Japan’s trade data for September. Exports fell 5.2% y/y, more than the -4.0% analysts had expected and the tenth straight month of contraction. Meanwhile, imports fell 1.8% y/y, which was better than the -2.8% forecast. As a result, the merchandise trade deficit was wider than expected, but still narrowed to ¥123.0 billion from ¥143.5 billion in August. That’s the smallest deficit in three months.
There was only a muted reaction to the data in USD/JPY, with the pair’s direction dictated more by a slight risk-on mood in the markets. The yen fell 0.06% versus the US dollar, bringing a three-day rising streak to an end. The pair is now at 108.49 and is consolidating below the 200-day moving average at 109.08.
USD/JPY Daily Chart
A slow start on the calendar
German producer prices for September and a monthly Bundesbank report are the only items on the European calendar while the US calendar is devoid of data or events. Canada goes to the polls today with surveys suggesting it could be a close-run thing.
The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/ 
OANDA Senior Market Analyst Craig Erlam previews the week’s business and market news with Jazz FM Business Breakfast presenter Jonny Hart. This week they discuss the week’s Brexit developments ahead of the crucial vote in Parliament on Saturday, Chinese GDP figures and preview next week’s ECB meeting
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