 Sterling opens the week lower and stays generally weak today. As the crucial Brexit votes loom there is no breakthrough on the issue of Irish backstop. EU's so called "concessions" were rejected by the UK government. And there is practically no chance of getting the same Brexit deal through the parliament. Seeking an Article 50 extension is the likely outcome after the week. But no one actually knows what's next with the extensions, and what for. Staying in the currency markets, Yen is the strongest one so far even though Asian markets recovered from Friday's steep losses. The markets are generally mixed though. Technically, Yen will be a key to watch this week. After the strong rebound last week, Yen is pressing key near term resistance, and break will indicate near term bullish reversal. The levels include 124.23 in EUR/JPY, 77.44 in AUD/JPY, 82.26 in CAD/JPY. 110.35 support in USD/JPY is a bit farther away but it's still worth watching. Dollar retreated mildly after poor job data on Friday. But there is no follow through selling. The greenback remains bullish in near term against most currencies except Yen. 1.1176 in EUR/USD, 0.7003 in AUD/USD, 1.0124 in USD/CHF and 1.3467 in USD/CAD will also be watched to track when Dollar resumes rally. In Asia, Nikkei closed up 0.35%. Hong Kong HSI is up 0.63%. China Shanghai SSE is up 1.38% at 3010, back above 3000 handle. Singapore Strait Times is down -0.07%. Japan 10-year JGB yield is down -0.0007 at -0.033. |
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