Entering into US session, Sterling is trading as the strongest one for today, paring some of yesterday’s steep losses. Strong wage growth is a positive factor for the pound. Also, traders are awaiting the results of Prime Minister Theresa May’s EU tour. Both European Council President Donald Tusk and European Commission President Jean-Claude Juncker are clear that they won’t renegotiate the Brexit agreement. But they’re willing to give further assurance to help May secure parliamentary approval. We’ll see what they’re going to offer. Separately May’s spokesman also said the Brexit deal vote will happen before January 21, 2019.
Meanwhile, Australian Dollar follows as the second strongest on return of risk appetite. Sentiments are lifted by renewed optimism on US-China trade negotiation. So far, Chinese authorities and even media are distancing the arrest of Huawei’s executive to trade talks. Vice Premier Liu He had a telephone conversation with US Trade Representative Robert Lighthizer on timetable and roadmap for the next stage of negotiations. China dove Treasury Secretary Stephen Mnuchin was also present. Additionally, Bloomberg reports that China is considering to bring down auto tariffs from the current 40% to 15%. And a proposal has been submitted for review by the cabinet in the coming days. The news give solid boost to European stocks and US futures.
Quick update: Trump also just tweeted “Very productive conversations going on with China! Watch for some important announcements!”
In Europe, at the time of writing:
- FTSE is up 1.58%
- DAX is up 1.97%
- CAC is up 1.99%
- German 10 year yield is up 0.0182 at 0.264
- Italian 10 year yield is up 0.033 at 3.130
Earlier in Asia:
- Nikkei dropped -0.34%
- Hong Kong HSI rose 0.07%
- China Shanghai SSE rose 0.37%
- Singapore Strait Times dropped -0.43%
- 10 year JGB yield rose 0.0057 to 0.047
