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Markets opened quietly this week, belying the packed economic calendar that lies ahead, while political upheaval continues to keep Brexit headlines a regular staple of the UK’s and Europe’s morning coffee. The Aussie sputtered at the market open, gapping to the downside as China slammed the door on any trade talks with the US as $200 billion in tariffs on Chinese goods came into effect today.In energies, crude oil is seeing bullish pressure after OPEC opted to not even bother discussing increasing output at their latest meeting. The crude cartel will be meeting again in early December, but with the consortium not even hitting their current output caps, US President Donald Trump’s demands that OPEC soothes market fears caused by US sanctions on Iran are unlikely to be met with desirable action.  This week also sees another showing from the US Fed, and traders could be leaning to the bearish side in the run-up to the latest rate call from Fed chair Jerome Powell.  

Main Asia topics

Latest US and Chinese tariffs on each other’s goods took effect at 0401 GMT

Breaking News: Trump Administration is considering major, “administration-wide,” broadside against China – Axios

The global economy could face a “relapse” of crisis: BIS

The week ahead: week will kick off with RBNZ and FOMC – Nomura

Key focus ahead

The European market session will formally kick off the week’s trading with a trio of German IFO surveys due at 08:00 GMT, while GBP traders will be looking for updates on the current state of Brexit, which has seen focus shift from UK-EU talks to how the UK is grappling with Brexit internally, with a field of yelling voices trying to drown each other out within the political sphere and ideologies clash head-first as little agreement is seen across the board, both within and from outside of Britain.

The US-DE yield spread last week cleared into its highest peak since 1988, and EUR traders will be looking for this morning’s EU-focused data to offset the stretched tone of markets heading into Monday.

EUR/USD: Wider US-DE yield spreads and risk-off could cap upside ahead of Fed

Brexit continues to be a vexing topic within the UK as leavers and stayers continue to come to loggerheads within the British parliament, and with a thin economic calendar slated for the day, headlines can be expected to dominate, though tensions may find themselves waning today after weekend headlines suggesting that the UK’s Prime Minister Theresa May might call a snap election in an effort to shore up political support at home were talked down by the UK’s own Brexit minister, helping to ease market tensions at the outset.

GBP/USD: Gravestone doji makes this week’s close pivotal, Brexit minister rules out November snap election