Entering the US session, the biggest news today is that UK PM Theresa May’s moment of truth has finally come. There are enough requests to trigger a no-confidence vote, which will be held at 1800-2000GMT today. The results will likely come out at around 2100GMT. The Pound actually strengthens on the news. The question is, should May will the vote, would that mean the tories should unite and stay behind her Brexit deal? And, should May lose, a new leader will come in and there is definitely not enough time for Brexit renegotiation. Then, the article 50 requests is likely needed to be revoked. Brexit would be delayed or even cancelled. These cases are most likely much better than a no-deal hard Brexit.

Staying in the currency markets, Euro is trading as the second strongest one, followed by Canadian. New Zealand Dollar is the weakest one, walking its own path. Swiss Franc and, to a much lesser extend, Yen are next weakest on improved risk appetite. European stocks are trading broadly higher, including FTSE. It seems like UK investors are feeling nothing about May. Asian markets also closed broadly higher. Progress of US-China trade talk is lifting sentiments general.

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At the time of writing in Europe:

  • FTSE is up 1.31%
  • DAX is up 0.94%
  • CAC is up 1.67%
  • German 10 year bund yield is up 0.002 at 0.238
  • Italian 10 year yield is down -0.052 at 3.065. German-Italian spread is now at 282

Earlier in Asia:

  • Nikkei closed up 2.15% at 21602.72
  • Hong Kong HSI rose 1.61% to 26186.71
  • China Shanghai SSE rose 0.31% to 2602.15
  • Singapore Strait Times rose 1.33% to 3099.99
  • 10 year JGB yield rose 0.0105 to 0.056, back above 0.5 handle.


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