Sterling suffers steep selling today after the UK Government conceded that there will be no Brexit compromise with opposition Labour any time soon. Thus, UK is prepared to participate in European election on May 23. New Zealand Dollar pared back much of the post RBNZ rate cut spike losses. Though, it remains the second weakest for today. Yen is at this point, the strongest one for today, but it's really a tie with Euro and Swiss Franc. Risk aversion clearly dominates the markets on concerns over China trade war. Trump's latest tweet indicates that he's not going to back down with China and hailed that he'd be happy with over USD 100B a year in tariffs. Technically, GBP/JPY's strong break of 143.72 support aligns its outlook with USD/JPY and EUR/JPY. That is, recent rebound from 131.51 has completed and outlook is turned bearish that could eventually bring retest of this low. 1.2987 support is now an immediate focus in US session. Break will dampen original bullish view and put focus back to 1.2865 support. In Europe, FTSE is currently down -0.28%. DAX is up 0.40% as supported by German data. CAC is flat. German 10-year yield is down -0.0099 at -0.045, a clear sign of risk aversion. Earlier in Asia, Nikkei dropped -1.46%. Hong Kong HSI dropped -1.23%. China Shanghai SSE dropped -1.12% to 2893.76, back below 2900. Singapore Strait Times dropped -0.87%. Japan 10-year JGB yield was flat at -0.05. |
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