Kyosuke Suzuki

Broadly speaking, there are two scenarios. There will be a short extension before the parliament will agree on Johnson's plan. Or there could be a general election, which would need a longer extension, but it now seems unlikely that Britain will crash out of the EU on Oct. 31.

At this point, markets will have to wait and see. Of course we need to be guarded against more crazy headlines, but this week could be a bit calmer given holidays in China. Economic data will likely be the main driver for markets.

Because Trump talked about the $500 billion figure, it was not a complete surprise. Yet markets will inevitably react to these types of news headlines.

Because Trump talked about the $500 billion figure, it was not a complete surprise. Yet markets will inevitably react to these types of news headlines, since the new tariffs won't be in place for two months, markets could soon calm down, although we will have to see how share markets, especially Chinese shares, will react to this.

All in all many in the market had already factored in the likelihood of Greece defaulting. But there is no guarantee the stability will last. What is worrying is the volatility in the risk asset markets, which could impact currencies.

The rise in the dollar against the yen has been steep but sentiment favours testing new highs rather than consolidating.

The rise in the dollar against the yen has been steep but sentiment favors testing new highs rather than consolidating.

The market has witnessed this before - it remembers the brinkmanship during the Greek debt negotiations of 2011. There are only nine trading days left until the Feb. 28 deadline but some see that as enough time. Thus we are not seeing the euro sold in panic, on the other hand tail risk is definitely rising. This is limiting bargain-hunting of the euro by short-term players and the currency will remain under selling pressure.

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The market had been a bit optimistic about an agreement so it was a bit of a surprise, but from the past experience during the euro zone debt crisis, the market is also accustomed to negotiations dragging on until the very last minute. So while the tail risk appears to be rising, there is no panic in the market.

The market had been a bit optimistic about an agreement so it was a bit of a surprise, but from the past experience during the euro zone debt crisis, the market is also accustomed to negotiations dragging on until the very last minutes. So while the tail risk appears to be rising, there is no panic in the market.

For Powell, there is no merit in specifying the exact timing for tapering at today’s speech. If he doesn’t drop a clear hint, that will be mildly positive for stocks.