Daily thread to exchange ideas and to share your thoughts
Happy Monday, everyone! Hope you're all doing well as we get things going here on the session. It's been a lively start to the week as risk-off flows dominate with US-China trade tensions flaring up and the PBOC allowing the yuan to weaken past 7.00 against the dollar - after fixing the currency at its weakest level this year.
The yen is leading gains in the currencies space with the franc also showing decent strength while gold is shining brightly as safety flows prevail thus far. As such, commodity currencies are lagging behind with equities being hammered while bonds are rallying further.
The key question now is how long will this doom and gloom last? What is the next trigger to watch out for? In the immediate term, just be wary of Trump's response.
But in the bigger picture, I reckon this could be the start of a shift in market focus towards being more concerned about the global economic slowdown. As such, should global economic and trade data continue to point towards recession-like symptoms, expect markets to put more weight on safety flows towards the end of the year.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.
