USDJPY Jolted by Japanese GDP, GBPUSD Risks the Same on CPI
• Japan's GDP figures showed the country in an official recession - a troubling sign for Yen and confidence
• The shock of recession from one of the world's largest economies didn't tip the S&P 500 however
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The new trading week would open to volatility right out of the gate. An unexpected tip into recession for Japan - the third largest economy amongst countries - sent a shudder through the capital markets. However the further slowdown in the global economy, moderation of return potential and stretched positioning of the markets didn't seem to set off panic. The S&P 500 and Yen crosses refused to cave to the data. Instead, Japan's recession seems to be feeding a more active (and hopeful for many) theme: expectations for monetary policy. A delay in the second tax hike looks more likely, as does a possible BoJ stimulus upgrade. Central bank policy remains the most active theme for now with UK CPI data coming up, ECB President Draghi teasing possible sovereign bond purchases and US officials padding rate speculation. We discuss this and its market impact in today's Trading Video.
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