US futures are "only" down by ~0.2%

E-minis 23-01

I reckon this is going to be a key spot to watch in trading today i.e. the performance of US equities. Despite quite extensive mood in Asian equities - China especially - the reaction in US futures is hardly anything to take much note of.

Both the Shanghai Composite and CSI 300 indices are currently down by over 3%, with the latter heading for its biggest drop since May last year. Even USD/CNY has risen back above 6.93 as a result of the more defensive risk flows we're seeing today.

Meanwhile, 10-year Treasury yields are down to two-week lows around 1.743% with USD/JPY also keeping at session lows on the day at 109.53 at the moment.

As European traders start their day, just be mindful that any potential fallout in US stocks is going to have more significant repercussions for risk trades despite the already softer risk sentiment we're seeing so far today.