 Swiss Franc tumbles broadly today as easing concerns over Italy's budget narrows Italian-German yield spread notably. Italy Economy Minister Giovanni Tria's comments over the weekend were well received by the markets. Euro also strengthens broadly, except versus Australian Dollar and Sterling. Aussie is merely in consolidation, digesting recent steep, trade war triggered losses. Sterling is mildly firmer as 3-month GDP growth hit the highest rate in nearly a year. Canadian Dollar is the second weakest and there is no end in sight on NAFTA negotiation. At the time of writing, 10 year Italian yield is down -0.0972 at 2.947, back below 3.000 handle. German 10 year bund yield is up 0.014 at 0.405, back above 0.400. Spread at 300 now looks rather distant. European stocks are trading generally up, paring last week's deep losses. FTSE is up 0.35%, DAX up 0.61% and CAC up 0.67%. Asian markets clearly under performed with China SSE lost -1.21% to 2669.48, Hong Kong HSI dropped -1.33% to 26613.42, Singapore Strait Times fell -0.43% to 3120.92. Raising trade tension between US and the rest of the world is weighing down sentiments. But Japanese Nikkei buck the trend and gained 0.30% even though Japan is clearly Trump's next target. Technically, now there is realistic chance of bottoming in USD/CHF, EUR/CHF and even GBP/CHF. 0.9766 in USD/CHF, 1.1319 in EUR/CHF and 1.2665 in GBP/CHF are the levels to watch. Break of these levels will be strong signal of near term reversal. It should be noted that while EUR/USD recovers ahead after breaching 1.1529, the recovery is very weak so far. 1.1529 remains rather vulnerable and bring will confirm completion of rebound from 1.1300. Dollar is consolidating against both Australian and Canadian Dollar for now. But its rally could resume any time. |
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