 Risk appetite is general strong today on rather positive news. Firstly, US and China both confirmed that trade negotiations are continuing and both teams are in preparing for a high-level face to face meeting in October. There is no specific date for the meeting yet. But with new tariffs looming on October, it's clear that China is refraining from more retaliation, but opt for consultations. In the UK, it's now look very likely that no-deal Brexit on October 31 would be averted. The government announced it was dropping its opposition to the legislation in the House of Lords. The question is now on when general would be held. In Italy, new coalition, with a pro-EU economy minister, sworn in today, suggesting better relationship with EU ahead. In the currency markets, Yen and Swiss Franc are overwhelmingly the weakest ones, followed by Dollar. Sterling is the strongest, followed by New Zealand Dollar and then Australian. Technically, USD/JPY's break of 106.73 resistance confirms short term bottoming. Similarly, EUR/JPY's break of 117.91 also confirms short term bottoming. Both are in-line with underlying risk appetite. GBP/USD's break of 1.2309 resistance also suggests short term bottoming. A focus would be on 0.8819 support in EUR/GBP. Break there will be another evidence of sustainable Sterling rebound. In Europe, FTSE is down -0.72%. DAX is up 0.82%. CAC is up 1.12%. German 10-year yield is up 0.0652 at -0.605, and a close above -0.6 today will certainly be an indication of improving market sentiments. Earlier in Asia, Nikkei rose 2.12%. Hong Kong HSI dropped -0.03%. China Shanghai SSE rose 0.96%. Singapore Strait Times rose 0.53%. Japan 10-year JGB yield rose 0.0128 to -0.271. |
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