"Market participants will also keep a close eye on this week's release of the Autumn Statement in the UK.

This sets out the government's fiscal agenda. The market is expecting modest proposals, probably combining a mix of growth-enhancing infrastructure spending and wider deficits. The latter reflects weaker growth and enhanced spending, but TD expects a somewhat conservative budget.

Namely, our take is that the government offers modest stimulus that merely lessens the degree of austerity built into prior forecasts. We suspect this is unlikely to lead to the full handover from monetary to fiscal, so the net result is that longer-term GBP will continue to bear the brunt of the economic adjustment.

Even so, near-term, GBP currently reflects much of the negative in the price (and with market positioning overextended) GBP could consolidate on the release".

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