Selloff in European majors, led by Sterling, intensify in European session today. It now looks like Brexit negotiation has not just stalled, but regressed. UK Prime Minister Theresa May’s spokesman James Slack said the Cabinet has backed May in Brexit and expects them to continue to do so. But apparently, May is starting to lose support even from the remain camp in her party. May is moving backward.
Euro is not far behind with EUR/USD taken out 1.13 key support firmly. EUR/JPY also broke 128.60 near term support. Italian Prime Minister office denied that there would be a cabinet meeting on budget today. Deputy Prime Minister Luigi Di Maio continued with populist rhetoric and said respecting EU budget limit is suicidal. We’ll see what revised plan they’re going to re-submit to the European Commission tomorrow.
For now, Canadian Dollar is trading as the strongest one for today. But that’s firstly because it’s digesting last week’s broad based loss. Secondly, Canada is not at the center of any storm for now. Third, WTI crude oil recovers today on Saudi Arabia’s export cut and is back above 60. Dollar is the second strongest, followed by Yen and both are showing promising technical developments.
In other markets, major European indices are soft today. At the time of writing:
- FTSE is flat
- DAX is down -0.70%
- CAC is down -0.16%
- German 10 year yield is down -0.0198, at 0.389, back below 0.4
- Italian 10 year yield is up 0.034 at 3.432. That is, spread with German is back above 300
Earlier in Asia:
- Nikkei rose 0.09% to 22269.88
- Hong Kong HSI rose 0.12% to 25633.18
- China Shanghai SSE rose 1.22% to 2630.52. But that’s seen mainly as gap covering.
- Singapore Strait Times dropped -0.32% to 3068.15
