Entering into European session, Dollar continues to pare back post FOMC losses and is trading as the strongest for today. The boost from Fed’s dovish turn on equities was rather brief. Yen follows as the second strongest as overall market sentiments turned mixed. On the other hand, commodity currencies turned lower, as lead by Australian Dollar, after poor manufacturing data from China.
The two-day US-China trade talks ended without anything concrete, expect China’s pledge to buy 5M tons of soybeans per day. The demand on enforcement of the agreement was emphasized throughout. And China seemed to have listened. But even Trump admitted it’s not yet at the stage to set up a meeting with Chinese Xi to seal the deal yet. The next milestone will be USTR Lighthizer’s visit to Beijing after Chinese New Year. For now, Dollar and stocks will turn to today’s non-farm payroll first.
For the week, Sterling is the weakest one on Brexit uncertainty. The EU, Britons and the markets are awaiting UK’s alternative proposals on Irish backstop. Swiss Franc is the second weakest. Despite today’s pull back, commodity currencies are the strongest ones this week together with Yen.
In Asia,
- Nikkei closed up 0.07% at 20788.39.
- Hong Kong HSI is down -0.21%.
- China Shanghai SSE is up 1.30%.
- Singapore Strait Times is down -0.02%.
- Japan 10-year JGB yield is down -0.0188 to -0.016.
Overnight,
- DOW dropped -0.06%.
- S&P 500 rose 0.86%.
- NASDAQ rose 1.37%.
Long term US treasury yields tumbled sharply.
- 10-year yield dropped -0.60 to 2.635, moved further away from 2.7 handle.
- 30-year yield dropped -0.048 to 3.005, threatening 3.0 handle.
