- Japan’s strategy minister sees big risk to global and Japanese economies from the EU debt crisis and recovery is a long way off
- Spreads in corporate credit markets continue to widen
- Speculative positioning against the GBP at record levels
- North Korean military on combat footing
- Korean stockmarket falls by 4.25%, other bourses fall by 3% on average
- Oil falls by 1.5%, back below $70/bbl
We had expected a quiet trading session after very slow North American trade but risk aversion and fear were in the market from early this morning and risk trades like AUD/JPY have been the big losers.
AUD/USD closed in NY around .8265 but dealers immediately targeted trailing stops below .8240 and the trend was set for the session. After some consolidation, news that North Korea was headed to a military footing sent the AUD/USD below .8200 and whilst it bounced well on the first occasion, the bearish momentum has been persistent and the AUD is headed into Europe close to its session lows. Ranges: .8171/.8265, AUD/JPY 73.50/74.50.
USD/JPY has again had very little momentum on its own account, moving around with sentiment on the crosses. Ranges: USD/JPY 89.90/90.31, EUR/JPY 110.53/11.60.
EUR/USD had one goal in mind in early trade and that was to trigger stops below 1.2290. Once that was done, the pair has traded quietly in a 30 pip range. Overall range: 1.2284/1.2370
EUR/GBP has traded in a very quiet .8561/79 range with trader’s focus elsewhere. Cable has followed the EUR lead in a 1.4335/1.4420 range.
Markets: Nikkei -3.1%, HK -2.5%, Kospi -4.2%, Sydney -2.2%. Oil -1.5% @ $69/bbl, Gold steady at $1195/oz.
