No joy for the Brexiteers
|The critical headline of the day comes from the DUP, with party officials saying they won't vote for UK PM Johnson's Brexit deal. Until now speculation over that has been the critical driver of sterling after peaking just above 1.300, so unsurprisingly UK risk appetite is taking a hit now. With the DUP, it's not only their ten votes that count. Several of the ERG have said they will take the lead from them, so if the DUP votes against a deal, but it will also probably take about another 8 or so votes away. Suggesting, that in a minority government, 18 is a lot of votes to pick up and could be a bridge too far, especially amid speculation that most of those voters are pushing for a second referendum.
On the other deal that's in the works
USDCNH bottomed out at 7.0675 on Brexit news in addition to positive China trade news. The market was positioned for a China backtrack of phase one. So, it was an about-face for the Yuan bears after China's Commerce Ministry inferred trade talks were entering the phase 2 level. In one fell swoop, a lot of pent up trade talk scepticism was shed by Asia's key risk bellwether USDCNH.
USDCNY was fixed at 7.0789 today, so Yuan traders logically bought the dips below 7.050, as the market pivots to China GDP data where we could be in for yet another economic wobble.
There were several stops getting triggers USDSGD throughout the Yuan run as it appears the markets were positioned for the USDSGD to go " screaming " through 1.4000.
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