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Yen Aims to Extend Gains as Risk Aversion Continues to Sweep Markets

Yen Aims to Extend Gains as Risk Aversion Continues to Sweep Markets

Talking Points:

  • Euro Declines, Japanese Yen Gains Amid Risk Aversion in Overnight Trade
  • S&P 500 Futures Hint Risk-Off Trade to Continue in European, US Sessions
  • Final Eurozone CPI Data, Draghi Commentary to Inform ECB Policy Bets

The anti-risk Japanese Yen traded higher as risk aversion gripped financial markets at the start of the trading week, adding as much as 0.6 percent on average against its top counterparts. The MSCI Asia Pacific regional benchmark stock index fell percent. The Euro faced broad-based selling pressure, falling as much as 0.7 percent against the majors.

More of the same looks likely ahead. S&P 500 futures are pointing firmly lower in late Asian hours, hinting that sentiment will remain under pressure in on-coming trade. That bodes well for the Yen and may put risk-geared currencies like the Australian Dollar under pressure.

The final set of October’s Eurozone CPI figures headlines the economic data docket. The core year-on-year inflation rate is expected to register at 1 percent, confirming flash estimates. ECB President Mario Draghi is likewise scheduled to speak.

Traders will size up both outcomes to inform speculation about the likelihood of stimulus expansion at next month’s policy meeting and the strategy for its delivery. The ECB may opt to expand the scope of QE-eligible instruments, an outright increase in the size of monthly asset purchases, a cut in the deposit rate, or some combination thereof.

Losing Money Trading Forex? This Might Be Why.

Asia Session

21:30NZDPerformance Services Index (OCT)56.2-59.0
21:45NZDRetail Sales Ex Inflation (QoQ) (3Q)1.6%1.4%0.1%
23:50JPYGDP SA (QoQ) (3Q P)-0.2%-0.1%-0.2%
23:50JPYGDP Annualized SA (QoQ) (3Q P)-0.8%-0.2%-0.7%
23:50JPYGDP Nominal SA (QoQ) (3Q P)0.0%-0.2%0.2%
23:50JPYGDP Deflator (YoY) (3Q P)2.0%1.7%1.5%
23:50JPYGDP Private Consumption (QoQ) (3Q P)0.5%0.4%-0.6%
23:50JPYGDP Business Spending (QoQ) (3Q P)-1.3%-0.5%-1.2%
00:01GBPRightmove House Prices (MoM) (NOV)-1.3%-0.6%
00:01GBPRightmove House Prices (YoY) (NOV)6.2%-5.6%
00:30AUDNew Motor Vehicle Sales (MoM) (OCT)-3.6%-5.9%
00:30AUDNew Motor Vehicle Sales (YoY) (OCT)4.2%-7.8%

European Session

08:00CHFTotal Sight Deposits (NOV 13)-467.2BLow
08:00CHFDomestic Sight Deposits (NOV 13)-402.6BLow
10:00EUREurozone CPI (MoM) (OCT)0.1%0.2%Medium
10:00EUREurozone CPI (YoY) (OCT F)0.0%0.0%Medium
10:00EUREurozone CPI Core (YoY) (OCT F)1.0%1.0%Medium
10:15EURECB’s Draghi Speaks in Madrid--Medium

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3

--- Written by Ilya Spivak, Currency Strategist for

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