"Retreating French bond yields, with the 10yr down to 3.50% this morning from 3.60% earlier in the week and the spread with the bund back to where it was Monday AM, reflects less immediate sense of crisis for the Macron regime as he is set to name a new prime minister this evening. What's the French for 'trying the same thing and expecting a different result'?"
"Meanwhile Japan's political situation got a little more complicated as the Komeito party quit the ruling coalition just days after Takaichi Sanae was elected LDP leader and prime minister. Could it require fresh elections? The yen is stabilising a bit this morning - maybe less immediate chance of stimulus - after a bruising week saw it retreat to its weakest since February vs the dollar, which is looking a lot more MAGA."
"Looks to be a fair amount of support around this region from a bull flag in August and it's the last key Fib retracement level of the Jul-Aug decline. Below here we can see 1.3140, the low hit on both 12 May and 1 August. This is not just sterling weakness - DXY has risen clear of the 99 level, touching 99.43 on a broad snapback in the short dollar trade as some speculative shorts seem be getting squeezed."
French 10-year yields fell to 3.50% from 3.60%, narrowing the spread with the bund and easing immediate crisis perceptions as a new prime minister is to be named. Political uncertainty in France makes fresh elections likely. Japan’s Komeito party quit the ruling coalition after Takaichi Sanae became LDP leader and prime minister, complicating domestic politics and raising the prospect of fresh elections. The yen stabilised after reaching its weakest since February. Sterling is under pressure, testing 1.33 support and eyeing 1.3140. The dollar has strengthened, with DXY clearing 99 amid short-covering and tactical dollar buying to hedge consumer credit risks.
Read at London Business News | Londonlovesbusiness.com
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