 The markets were rocked by three key events last week, UK Election, US-China trade deal and FOMC rate decision. Sterling ended as the strongest one last week as boosted by the Conservative's landslide victory in UK election, removing a large of of Brexit uncertainty. Canadian Dollar followed crude oil higher, as partly boosted by US-China trade deal. Yen was the weakest one on strong risk appetite as US stocks extended record runs. Dollar followed as the second weakest after Fed Chair Jerome Powell dampened the chance of any rate hike soon, indicating that interest rate will stay at current level unless there is material surprise in inflation. Meanwhile, actions in the markets late Friday suggested investor's ecstasy might not last long. DOW showed hesitation in its upward push. 10-year yield suffered steep decline. Yuan's rebound reversed while AUD/JPY also retreated sharply before close. We believe that a large part of investors were unhappy with the "tiny" tariff rollbacks brought by the US-China trade deal. The early part of the upcoming will be important to gauge the commitment of the optimists. |
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