• Oil prices at 4-year high after OPEC declines to raise supply 
• Bank holiday in China and Japan
• Trade Talks: Abe's trade discussion with Trump is "constructive" in second round, China will only hold trade talks once Trump stops threats
• Trade wars cause the European markets to dip, Brexit is also affecting  sentiment  
• Dollar remains steady, whilst Indian rupee drops 

Asian overnight: A largely bearish affair overnight saw losses through the Hang Seng and ASX 200, as Japanese and Chinese markets enjoyed national holidays. The recent tariffs imposed by the US (and in turn China) have knocked back hopes for trade negotiations between the two biggest countries, with market sentiment taking a turn at the knowledge that the trade war will rumble on for some time yet. Meanwhile, crude prices rose after OPEC (and Russia) decided against raising production at Sunday’s meeting despite calls from Donald Trump to help drive prices down.

UK, US and Europe: Looking ahead, a somewhat quiet economic calendar draws our attention to the German IFO business climate release, alongside the afternoon appearance from Mario Draghi. Expect the euro to be in focus, with last month’s sharp IFO bounceback expected to flounder, with a somewhat less impressive figure this time around.

Economic calendar - key events and forecast (times in BST)

Source: Daily FX Economic Calendar

9am – German IFO index (September): business climate index to rise to 104 from 103.8. Market to watch: EUR crosses
1.30pm – US Chicago Fed index (August): expected to rise to 0.2 from 0.13. Markets to watch: US indices, USD crosses. 

Corporate News

• Michael Kors is said to be near agreement to buy Italy's Versace. 
• Randgold Resources has agreed to a merger with Barrick Gold to form an $18.3 billion company. Randgold shareholders will get 6.128 Barrick shares for each Randgold share. 
• Pennon said trading remained in line with forecasts and it was still on track to hit full-year expectations.  
• Comcast beat Fox in $39 billion Sky auction. 
• Thomas Cook has downgraded annual earnings guidance due to the warm summer weather. Earnings before tax and interest are now expected to be around £280 million. Total group bookings were up 12% over the year, but prices were down 5%.

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