Asian markets turned mixed as the rebound in US stocks somewhat lost steam. At the time of writing, Nikkei is trading down -1.14%. Hong Kong HSI is up 0.37%, China Shanghai SSE is up 0.23%. Singapore Strait Times is up 0.64%. Japan 10-year JGB yield is down -0.0026 but stays positive at 0.028.
Overnight, DOW ended up just 0.39%, S&P 500 rose 0.41% and NASDAQ gained 0.87%. DOW closed above 38.2% retracement of 26951.81 to 21712.53 at 23713.93 for the second day. Rebound from 21712.53, while slightly stronger than expected, could still be a corrective move. But for now, it will likely have a go at 55 day EMA (24311.49) at least.
Developments in US treasury yields were also positive. 30-year yield rose 0.031 to 3.024, above 3% handle. 10-year yield rose 0.012 to 2.728. But 5-year yield dropped -0.012 to 2.599. Strength at the long end will be welcomed by Fed policy makers. But yield curve remains inverted from 1-year (2.602) to 2-year (2.561) to 3-year(2.533).
In the currency markets, Dollar was sold off overnight after a chorus of Fed officials who want “patience” before another rate hike, including Boston Fed Eric Rosengren, Chicago Fed Charles Evans, Atlanta Fed Raphael Bostic. FOMC minutes of the December meeting also reflected the cautious tone. They noted that “many participants expressed the view that, especially in an environment of muted inflation pressures, the committee could afford to be patient about further policy firming.”Also “a number of participants noted that, before making further changes to the stance of policy, it was important for the committee to assess factors,” including risks on growth and the impact of past rate hikes on the economy.
Dollar is the weakest one for the week for now, followed by Sterling and then Yen. Euro and Swiss Franc are the strongest ones.
UK PM May: Blocking Brexit will be catastrophic and unforgivable breach of trust in our democracy
Ahead of the Brexit meaningful vote on Tuesday, UK Prime Minister Theresa May said in an articles in Sunday Express that blocking Brexit would be a catastrophic and unforgivable breach of trust in our democracy”. And she urged the Parliament to “forget the games and do what is right for our country.”
May is also expected to warn in a speech today that “there are some in Westminster who would wish to delay or even stop Brexit and who will use every device available to them to do so”. And, based on the evidence she recent saw, it’s more likely for MPs to block Brexit than leaving EU with no deal. May will ask MPs to “consider the consequences of their actions on the faith of the British people in our democracy”.
Separately, pro-EU Liberal Democrat leader Vince Cable said on Sunday that the parliament will act to stop no-deal Brexit from happening. Should May’s deal be voted down, Cable said MPs would bring forward legislation to revoke Article 50. He added “that is exactly what we should be doing because it would be absolutely outrageous and unforgivable if the chaotic circumstances of a no deal were allowed to happen.”
Labour leader Jeremy Corbyn told BBC TV that “my own view is that I would rather get a negotiated deal now, if we can, to stop the danger of a no-deal exit from the EU on the 29th of March which would be catastrophic for industry, catastrophic for trade.”