 The forex markets are rather mixed today. Italy's budget clash with EU is clearly a concern of investors. Markets are anticipating the tension between Rome and Brussels to intensify with a penalty on breach of EU fiscal rules. Italian 10-year yield jumps sharply higher today while German 10-year yield is extending recent free fall. But such concerns are not much reflected in other markets. Yen attempted to rally on falling yields earlier today but there is no follow through buying. It's nonetheless, among the strongest ones, together with Australian and New Zealand Dollars. On the other hand, at the time of writing, Canadian Dollar and Swiss Franc are the weakest. The picture could drastically change as US traders will be back after Monday's holiday. Technically, 109.02 in USD/JPY and 122.08 in EUR/JPY will remain the focuses today. In picture, Yen rally would pick up steam again should US 10-year yield accelerates down through 2.9 handle. For now, there is no clear strength in Dollar but there is no sign of bearish reversal yet. Dollar is stuck in range against Euro, Aussie and Canadian. It might need to wait for US inflation data on Friday to trigger a range breakout. In Europe, FTSE is currently up 0.48%. DAX is up 0.08%. CAC is up 0.08%. All three indices reversed initial losses. German 10-year yield is down -0.0197 at -0.148, after hitting as low as -0.16. Earlier in Asia:, Nikkei rose 0.37%. Hong Kong HSI rose 0.38%. China Shanghai SSE rose 0.361% to 2.909.91, regained 2900. Singapore Strait Times dropped -0.17%. Japan 10-year JGB yield dropped -0.0038 to -0.07. | 
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