Entering into US session, Sterling is trading as the strongest one for today so far, despite very poor UK PMI services. Technical support is a reason for the Pound’s rebound. GBP/USD drew support from 1.2661 key level. EUR/GBP was also rejected by 0.8939 near term resistance. But at the same times, traders are readjusting their positions on reassessment of Brexit vote outcome. A tricky point is, as UK Trade Minister Liam Fox said, if the Commons vote down Prime Minister Theresa May’s Brexit deal on December 11, it could eventually lead to UK unilaterally withdrawing Brexit. That is, no Brexit at all. It’s far fetched for now, but not totally impossible.
Staying in the forex markets, Euro is trading as the second strongest one. Italian 10 year yield drops quite notably by -0.0769 to 3.072 at the moment. German 10 year yield is up 0.0074 at 0.271. That is, German-Italian spread is now at 280. That’s quite a positive development, as helped by continuous news/rumors/rhetorics that suggest Italy is working on its budget to avoid EU disciplinary actions. Dollar is following as the third strongest.
Meanwhile, Australian Dollar is the worst performing one with terrible weak Q3 GDP data as well as risk aversion. Yen is the second weakest for today, (but it stays as the second strongest for the week), as risk aversion doesn’t intensify in Asia and Europe. Canadian Dollar is the third as BoC rate decision is awaited.
In Europe, at the time of writing:
- FTSE is down -1.03%
- DAX is down -0.83%
- CAC is down -0.91%
- German 10 year yield is up 0.0074 at 0.271
- Italian 10 year yield is down -0.0769 at 3.072
Earlier in Asia:
- Nikkei closed down -0.53% at 21919.33, after hitting day low at 21755.17
- Singapore Strait times dropped -0.37% to 3155.92, after hitting day low at 3127.70
- Hong Kong HSI dropped -1.62%
- China Shanghai SSE dropped -0.61%
- 10 year JGB year dropped -0.0007 to 0.069
