 Sterling ended as the strongest one last week as it looks like Conservative is set to have a majority win in the upcoming elections. If materialized, UK is finally heading for an orderly Brexit next January, clearing all uncertainties. On the other hand, Japanese Yen was the weakest one, partly in reaction to the record runs in US stocks. Also, recovery in treasury yields, in particular as 10-year JGB closed back above -0.1% handle, gave the Yen some pressure. However, the markets are now entering into an important December. UK elections are one key risk. But more importantly, the upcoming two weeks would be make or break for US-China trade negotiations. It's now uncertain whether the phase one deal would be reached on time to avert next tariff escalation on December 15. Or, new batch of tariffs would be on hold while negotiations drag on to next year. Or, in rather unlikely way, negotiations break down. |
