Last week, early signs of a risk aversion swell were starting to show through an otherwise consistent performance in equities and carry trade. The climb in FX volatility measures and reversal in junk bond interest went mainstream at the beginning of this week. EURUSD suffered its second biggest daily drop in six months with clear impetus from European equities and underlying financial measures. This volatility shock has been good for short-term setups, but a robust and underlying trend still lacks the commitment needed from risk trends. We look at the fundamental cues and trade potential behind a genuine risk aversion move in today's video.
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