News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Heads Up:🇺🇸 Fed Williams Speech due at 19:10 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-25
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.07% Gold: -0.16% Silver: -0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/hbSoMksZVd
  • With South Africa recently easing restrictions in an effort to reopen the economy, investors are still wary about the future of the emerging market. Get your $USDZAR market update from @Tams707 here:https://t.co/f5Jmukipg0 https://t.co/o5Dyok2O99
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.38%, while traders in EUR/GBP are at opposite extremes with 65.19%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/eO8yAFDUvh
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: US 500: 1.06% Wall Street: 0.73% France 40: 0.65% Germany 30: 0.59% FTSE 100: 0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/UFnW7j9LC3
  • Update on #Cryptocurrencies #BITCOIN +0.29% #BITCOINCASH +0.02% #ETHEREUM +0.51% #RIPPLE +3.72% #LITECOIN +2.19%
  • It took some time for USD/MXN to respond to weakness in equity markets, but this week it came to life as U.S. weakness spread across global markets. Get your $USDMXN technical analysis from @PaulRobinsonFX here:https://t.co/G8b6w1wCzH https://t.co/zEtpARMkMg
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.38%, while traders in EUR/GBP are at opposite extremes with 65.20%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/WGk95Bnjx5
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Gold: -0.45% Oil - US Crude: -0.63% Silver: -1.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/RvLy6xA9Is
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: -0.06% 🇯🇵JPY: -0.15% 🇬🇧GBP: -0.22% 🇨🇦CAD: -0.32% 🇦🇺AUD: -0.38% 🇪🇺EUR: -0.43% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/MZIiNOFxXu
Yen to Rise if Post-Fed Unwinding Becomes Full-On Risk Aversion

Yen to Rise if Post-Fed Unwinding Becomes Full-On Risk Aversion

2013-06-21 06:43:00
Ilya Spivak, Head Strategist, APAC
Share:

The Japanese Yen is likely to rise amid carry trade liquidation if broad-based risk aversion grows out of investors unwinding Fed QE-dependent trades.

Talking Points

  • S&P 500 Futures Hint Sentiment May Recover But Ample Threats Remain
  • Japanese Yen to Rise on Carry Liquidation if Larger Risk Aversion Triggers
  • Significant Policy Breakthrough Not Expected at Eurozone FinMin Summit

S&P 500 futures are pointing higher overnight and arguing for a recovery in risk-geared assets through the end of the trading week. A period of correction seems reasonable after yesterday’s bloodletting that snapped a seven-month uptrend in US equities and forced sharp reversals in crude oil and gold, particularly given an absence of high-profile releases on the economic data docket. An interesting bit to consider going forward will be whether the latest round of selling in the stocks and commodities space translates into wider risk aversion.

Fixed income and foreign exchange markets noticeably diverged yesterday, with bonds falling alongside share prices – breaking with the familiar risk vs. safety dynamic – while Yen-funded carry trades largely opted out of the fireworks altogether. This hints the volatility seen over the past 24 hours reflected an unwinding of the “Fed levitation” trade, whereby investors dumped assets dependent on continued Fed support in the wake of the FOMC rate decision, rather than a full-blown meltdown in risk appetite.

Looking beyond the Fed policy outlook, reemerging threats to the global economic recovery may well justify a true risk aversion move. The prospect of a cutback in US policy support comes against a backdrop of lingering recession in Europe and continued signs of slowdown in China. In fact, the Fed’s signal of an end in sight to the “levitation” trade has compounded an already significant outflow of foreign capital out of China’s banking system, sending overnight borrowing costs soaring to record highs. If this credit crunch translates into global contagion fears, a far broader risk-off dynamic may grip financial markets.

A meeting of Eurozone Finance Ministers in Luxembourg highlights an otherwise lackluster helping of event risk due in European trading hours. Policymakers are expected to discuss proposals for region-wide bank supervision scheme. The creation of a single regulator is a prerequisite for direct recapitalization of troubled lenders via the EFSF/ESM bailout funds and traders will be watching officials’ commentary for signs of progress, although concrete policy details are not expected to emerge.

Capitalize on Shifts in Market Mood with the DailyFX Speculative Sentiment Index

Asia Session:

GMT

CCY

EVENT

ACT

EXP

PREV

22:00

NZD

ANZ Job Advertisements (MoM) (MAY)

-1.7%

-

0.7%

1:00

NZD

ANZ Consumer Confidence Index (JUN)

123.9

-

123.7

1:00

NZD

ANZ Consumer Confidence (MoM) (JUN)

0.2%

-

3.8%

6:35

JPY

BOJ Governor Kuroda Speaks at NASB

-

-

-

Euro Session:

GMT

CCY

EVENT

EXP/ACT

PREV

IMPACT

-

EUR

Eurozone Finance Ministers Meet in Luxembourg

-

-

High

7:00

CHF

Money Supply M3 (YoY) (MAY)

-

10.2%

Low

8:00

EUR

Euro-Zone Current Account s.a. (€) (APR)

-

25.9B

Low

8:00

EUR

Euro-Zone Current Account n.s.a. (€) (APR)

-

24.8B

Low

8:00

CHF

KOF Institute June Economic Forecast

-

-

Medium

8:30

GBP

Public Sector Net Borrowing (£) (MAY)

13.5B

8.0B

Low

8:30

GBP

Public Finances (PSNCR) (£) (MAY)

-2.5B

-10.8B

Low

8:30

GBP

PSNB ex Interventions (£) (MAY)

12.6B

6.3B

Low

Critical Levels:

CCY

SUPPORT

RESISTANCE

EURUSD

1.3153

1.3294

GBPUSD

1.5444

1.5582

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, please CLICK HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES