The UK Brexit negotiators have put a list of 80 points to the EU and have said that if these are not accepted, we will go for a hard Brexit. This is however not the favoured option, with Foreign Secretary Jeremy Hunt saying that a no deal Brexit "would be a mistake we would regret for generations", adding that he thought that other countries wanted to "engage seriously" to try to get a "pragmatic outcome". Cable remains down in the doldrums, trading at 1.2714 against the dollar.

Inflation comes in to focus today with key data out from the Eurozone and Canada, we start in the Eurozone at 10.00 BST with CPI (YoY) (Jul) forecast down -0.1% at 2.0% after hitting its highest levels since late 2012 in June, whilst (MoM) (Jul) is set for no change at 1.0%. At 13.30 BST our attention turns to Canada with CPI (YoY) (Jul) expected -0.1% lower, after coming in above forecast last time round, whereas (MoM) (Jul) is due to inverse from 0.1% to -0.1%. Inflationary pressure has been building in Canada with CPI above the BoC’s 2% target level since February this year, increasing speculation of a further rate hike in either September or October after increasing the base rate to 1.50% in July, although the ongoing trade dispute with the US may hinder this.

Turkey’s currency crisis eased somewhat on Wednesday after Qatar’s financial pledge and Ankara's crackdown on short-selling. Qatar are to loan $15bn to Turkey in order to help prop up the Lira…well at least for the time being. In a phone call between Angela Merkel and President Erdogan an agreement was reached for a meeting between their finance ministers although it is understood that no aid is being offered by Germany. Whilst over in the US, reports have confirmed that the increased steel tariffs will remain in place even if Ankara frees a US pastor. USDTRY has recovered from hitting record lows of 7.24 to trade at 5.85.

Today is all about Brexit with talks due to resume between the UK and the EU are in Brussels for two days, with time now of the essence for UK President May to reach a deal. Brexit uncertainty has continued to undermine confidence as we hear more every day of the increasing possibility of a "no deal" outcome, add this to a falling currency and the latest BoE rate hike and May certainly has her work cut out. Perhaps playing in to May’s hand is news that the EU could be worse off in the immediate aftermath of a no-deal Brexit, with EU officials stating "it will be very difficult to co-operate,” "In most areas where we will need to act there will be national vetoes in play - All countries will be able to block."

Turkey's President Recep Tayyip Erdogan has doubled tariffs on some US imports including automobiles, alcohol, tobacco and electrical products after Trump imposed punitive sanctions on the nation. Vice President Fuat Oktay said “The import duties were increased on some products, under the principle of reciprocity, in response to the U.S. administration’s deliberate attacks on our economy”. The move comes as tensions between the two NATO allies’ mounts over Ankara’s imprisonment of a US pastor and other diplomatic issues, which have seen the lira plummet to record lows against the dollar. The lira rebounded some 8% against the dollar on Tuesday as markets react to the promise of liquidity for banks and news of a conference call on Thursday in which the finance minister will try to reassure international investors.

US Retail Sales (MoM) (Jul), a gauge to the US economy’s health, will be released today at 13.30 BST. The headline volume of sales increased by 0.5% in June and is now projected to rise by 0.1%. Core sales rose by 0.4% last time out and are expected to continue its positive trend at 0.3% in July.

Economic data kicks off in earnest this week with the publication this morning of unemployment and average earnings figures for June due at 09.30 BST. The ILO measure of unemployment is expected to hold steady at 4.2%. Average earnings including bonuses are forecast to maintain the May level to at +2.5%, as are those excluding bonus payments, this time at +2.7% - no sign of a surge expected, although the likes of Ian McCafferty might describe this as the calm before the storm if their predictions are correct.

Asian shares traded mixed on Tuesday as they fought to contain the contagion from the sharp falls in the Turkish lira, whilst disappointing Chinese economic data further sapped market sentiment. Retail sales and Industrial production (YoY) (Jul) both came in below forecast at 8.8% and 6.0% respectively, perhaps pointing towards the need for more policy stimulus. The MSCI's broadest index of Asia-Pacific shares outside of Japan dropped -0.20%, whilst in Japan the Nikkei rose +2.28% with all sectors trading higher after the yen lost some of its recent strength, following recent gains as markets sought the ‘safe-haven’ currency after recent turmoil in Turkey. Elsewhere we saw Hong Kong’s Hang Seng index slide -1.16%, with sharp falls in industrial stocks leading the way.

The Turkish lira plummeted to a record low on Monday in what is now a fourth successive day of losses after President Erdogan defiant remarks, who shows no signs of backing down despite the US increasing pressure on the nation by taking the decision to double the tariff on Turkish steel and aluminium. The lira has dropped more than 20% against the dollar last week, and is down over 40% in the past year. Turkey itself, although in a dire situation, is not too much of a problem. It is the fear of contagion and the exposure of some international banks to the region that is causing the nervousness. The euro is showing signs of weakness as a result, giving, on the face of it, some relief to the beleaguered pound. Although this is far from the truth as its US dollar value attests.

Oil prices edged lower on Monday as markets remain bearish as concerns on fuel demand growth seep in to the market on heightening trade tensions and economic concerns in emerging markets, however US sanctions on Iran indicate towards tighter supply. WTI trades around $66.82 per barrel, whilst Brent is currently at $75.73 per barrel.

The Turkish lira has dropped over 12% against the dollar this morning on reports that the ECB is concerned about banking exposure to Turkey. As other emerging market currencies fall in line with TRY, markets look to press Erdogan to calm nerves when he speaks later today. USDTRY currently trades at 5.8616.

As the US imposed further sanctions against Russia and threatens more tariffs against China the global geo-political situation is not in the best shape it has ever been and the prospects for global trade are causing worries through the markets. Equities are showing some signs of concern and this is adding support to interest rate markets. The yield environment is pretty benign despite the US set to remain on its tightening path. In the UK Brexit continues to undermine confidence as we hear more every day of the possibility of a "no deal" outcome. This could mean that in order to support the economy, the next move in the Bank Rate could be down; we aren’t quite at that stage yet but this is a scenario that could gain in probability as the weeks progress.

Asian stocks traded mixed on Thursday, whilst advancing Chinese shares helped offset the escalating US-China trade war following yesterday’s announcement that the Chinese Government will impose their own 25% tariff on $16bn worth of American imports on items including medical equipment, fuels, paper, motorcycles and cars. In currencies the yen rose 0.1% against the dollar, whilst back in the UK the pound slumped against both the euro and the dollar as fears mount on a no-deal Brexit. The pound has tumbled 1.7% against the dollar and 0.8% against the euro since the start of the month, with cable trading at 1.2866 and EURGBP at 0.9011 this morning.

Oil prices slumped yesterday recording their steepest one day fall in more than three weeks as the escalating trade dispute between the world’s largest two economies begins to take effect. Mounting tensions between the US and China has raised concerns regarding global economic growth which would subsequently lower demand for oil. Data yesterday from the EIA showed a smaller than expected drop in US crude inventories at -1.351M against expected -3.333M. WTI trades around $66.22 per barrel, whilst Brent trades in the low $72 per barrel in early trading.

China’s exports advanced above expectation in July despite their trade surplus with the US remaining near record highs and the announcement from the US that a date has finally been set for a 25% tariff on a further $16bn worth of Chinese imports set to take effect 23 August. CNY exports for July (YoY) came in at +12.2% above forecast of +10.0% and advancing from June’s reading of +11.2%. Talks between the world’s two largest economies have failed to produce an agreement with markets now awaiting China’s response, either way the continuing escalating trade tensions have sapped market optimism as fears on global growth mount.

Outgoing MPC member Ian McCafferty, speaking on LBC radio, suggests that just a "couple" of rate hikes over the next "couple" of years. He said he doesn't know what impact unwinding QE will have on the economy but that nothing will happen on that front until the Bank Rate reaches 1.5%, a level from which they can be materially cut. McCafferty went on to blame a reduction in the number of European bankers living in London since the Brexit referendum for the fall in London property prices.

The pound is bearing the brunt of the rising alarm over the prospect of a "no deal" Brexit, slipping yesterday against both the US dollar and the euro. Hopes of higher yields from the currency were dissipated as part of the charm offensive that delivered the rate rise and this is also causing investors to vote with their feet. The pound hit an 11-month low against the dollar and trades around 1.2957 this morning, whilst EURGBP trades at 0.89324.

US economic sanctions against Iran have come into effect today affecting currency, gold and cars amongst other products. The sanctions follow US President Donald Trump’s decision in May to leave the international agreement which curbed Iran’s nuclear activities, a deal which Trump describes as the "worst deal I've ever seen". Nonetheless White House national security adviser John Bolton offered an 11th hour olive branch prior to the sanctions taking effect saying that “they could take up the president's offer to negotiate with them, to give up their ballistic missile and nuclear weapons programs fully and really verifiably”. Bolton went on to say "If the ayatollahs want to get out from under the squeeze, they should come and sit down. The pressure will not relent while the negotiations go on”. Negotiations do however seem some way of though for the time being with Hassan Rouhani, Bolton’s Iranian counterpart calling the actions of the US "psychological warfare", which doesn’t "make sense". The two nations remain at odds with one another and with further US led sanctions due to come into effect in November it is unlikely a resolution will be found anytime soon.