Entering into US session, all eyes will be on BoE Inflation Report. The Pound remains broadly strong today, except versus Australian and New Zealand Dollar. The boost from Brexit optimism is rather solid. UK Prime Minister spokesman James Slack said that the news regarding a Brexit financial services deal with the EU are merely speculations. But markets didn’t listen. Sterling also shrugged of much weaker than expected PMI manufacturing, which Markit described as “worrying turnaround.
On the other hand, Dollar suffers broad based selling pressure today. There isn’t any special fundamental news driving the decline. But rather, traders simply took profit as EUR/USD closed in 1.13 key support level. Perhaps today’s ISM manufacturing or tomorrow’s non-farm payroll report could give back some strength to Dollar. For now, Dollar bulls just refuse to commit. Yen is trading as the second weakest, followed by Canadian Dollar.
In European markets, major indices are trading up so far today:
- FTSE is up 0.49%
- CDAXAC up 0.84%
- CAC up 0.41%
- German 10 year yield is up 0.0187 at 0.408, back above 0.4
- Italian 10 year yield is down -0.0805 at 3.352. That is, spread with German is below 300 now.
Earlier in Asia:
- Nikkei dropped -1.06% to 21687.65
- Singapore Strait Times rose 1.39% to 3060.85
- Hong Kong HSI rose 1.75% to 25416.00
- China Shanghai SSE rose only 0.13% to 2606.24. Life above 2600 is not easy.
