It’s a rather slow day in terms of news and forex volatility. Italian stocks lead Europeans higher. At the time of writing, the FTSE MIB index is up 2.42%, responding well to S&P’s rating review. S&P kept Italy’s sovereign credit rating unchanged at BBB, two notches above junk, even though outlook is negative. FTSE 100 is up 1.31%, DAX is up 1.28% and CAC is up 0.26%.
Italian 10 year yield is down notably by -0.0817 at 3.348 at the time of writing German 10 year bund yield is up 0.034 at 0.392, below 0.4 handle. Also, spread remains at 295, below but close to 300. Euro also gives little reaction as it’s trading down against all other major currencies but Yen and Swiss Franc. JPY and CHF are weaker on receding risk aversion natural. So, we see how weak the Euro remains. On the other hand, commodity currencies are trading generally high as the strongest.
Earlier in Asia, major indices closed mixed. China Shanghai SSE closed down -2.18% at 2542.17. But the closely correlated Hong Kong HSI closed up 0.28%. Nikkei lost -0.16% and Singapore Strait Times gained 0.32%. Japan 10 year yield dropped -0.0095 to 0.105, now very very close to BoJ’s allowed range of -0.1 to 0.1%.
US personal income and spending, PCE inflation will be featured in US session. Hopefully, the data will trigger more volatility.