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If there's ever a reason to be extremely cautious in the market, it is China. For all the talk of blowup risks in the past decade or so, are we finally here?
It'll be quite the spectacle for markets in general as we are already seeing glimpses of contagion domestically with the potential for reverberations globally.
After having been rather iffy since last week, equities are on the backfoot with US futures also pointing to a much softer start today. Given the lack of key catalysts until we get to the Fed later in the week, risk sentiment is all there is to play around with.
As such, with the market starting to wake up to risks surrounding China, we may be set for a more defensive next couple of days as that also provides a good excuse for equity bulls (and risk trades) to take some money off the table for the time being.
In FX, the dollar looks to be in good standing and will likely keep that way as the market will also expect the Fed to at least acknowledge the start of taper discussions at the FOMC meeting later in the week.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.
