The historic defeat of UK Prime Minister Theresa May over the Brexit deal triggered some volatility in the Pound. But no clear direction is seen in Sterling after all the moves. It's staying bounded in relatively tight range overall, with a bias for further rise. UK CPI is usually a mover in normal circumstances. But traders might only be willing to commit further after the no-confidence vote. For now, Sterling will likely gyrate in established range first. On the other hand, clear down side bias is seen in Euro. Worries over slowdown in Eurozone economy is deepening. ECB President Mario Draghi also noted that the slowdown might be longer than expected. Weakness in Euro is somewhat dragging down the Swiss Franc too. Overall for the week, Sterling remains the strongest one while Euro is the weakest. Technically, EUR/USD is heading back towards 1.1307 minor support while USD/CHF is heading to 0.9963 minor resistance. Break of these level will carry near term bearish implication for both Euro and Franc. EUR/JPY is also pressing 123.40 minor support. Firm break there will open up more decline back to 118.62 low. In other markets, major Asian indices are steady in range. Nikkei is currently down -0.59%. Hong Kong HSI is down -0.22%, Shanghai SSE is down -0.10%, Singapore Strait Times is up 0.28%. Japan 10-year JGB yield is down -0.0051 at 0.009, still staying positive. Overnight, DOW rose 0.65%, S&P 500 rose 1.07%, NASDAQ rose 1.71%. Treasury yields continued to show strength at the long end. 30-year yield rose 0.011 to 3.071. 10-year yield rose 0.001 to 2.711. 5-year yield dropped -0.002 to 2.527. |
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