Reality hit home yesterday as risk aversion set in causing equities to sell off but FX markets had a placid session in the absence of any major economic data releases. Sterling and the FTSE will be the ones to watch today with David Cameron making his big speech on the UK membership of the European Union and already this morning GBPUSD is a little softer, however the FTSE is expected to recoup the 6300 level on the open this morning. He will set out his four major reforms and the clock will start ticking until the referendum takes place, regardless of whether an official date is set today or not, as we know for sure it will be before the end of 2017. The major issue faced by Cameron is timing because if his demands require treaty changes that need to be ratified before the vote then the end of 2017 is unrealistic since it can take many years for all member states to accept such structural alterations. One thing is certain and that is today the starting gun will fire leading to many months of debate over whether Brexit is in the best interests of the UK, its businesses and people. Softer inflation from China overnight has had little impact on the markets so far as tomorrow’s retail sales and industrial production are more likely to have an effect. The economic calendar is quiet today so it’s all eyes on sterling where cable is now testing 1.5100 at the time of writing. | 
