Entering into US session, Euro is trading as the weakest one for today, followed by Sterling. Yen is the strongest one, followed by Dollar. Euro is clearly troubled by surging Italian yield again, as 10 year yield breached 3.7 level and is now up 0.1091 at 3.676. German 10 year bund yield is also up 0.008 at 0.542. But German-Italian spread widens to over 3.1 now.
Additionally, the common currency is weighed down by IMF’s deep downgrade of 2018 Germany growth forecasts, from 2.5% to 1.9%. It’s reflected in European stocks indices too. German DAX is now down -1.14%, CAC down -0.74% and FTSE down -1.13%. Earlier today, Nikkei closed down -1.32%, Singapore Strait Times down -0.47%. Hong Kong HSI just lost -0.11%. China Shanghai SSE indeed closed up 0.17%.
Looking ahead, economic calendar is very light in US session today. Any Brexit news will drive volatility in Sterling for sure. But the main focus is whether, or how far, US yield would extends recent rally.
