The sell-off on the Shanghai exchange yesterday afternoon set things off and this has continued overnight with crosses like AUD/JPY and EUR/CHF getting pummelled. Governments have started to ease up with their spending sprees and many economies have immediately gone into slowdown.
I’m not sure if this move is going to develop into full volatile risk-aversion trading but some care is certainly warranted. Watch out for margin calls in the Japanese retail market at 09:00 Tokyo time. The retail market is thought to be long AUD/JPY in particular and if they get margin calls after big overnight moves it happens right on the Tokyo open.
Good luck today
