The Japanese currency stole the limelight across the fx space in Asia this Thursday, despite the FOMC minutes-induced rally in Treasury yields, as risk-aversion emerged the key theme after the Asian equities joined the Wall Street sell-off. Rising expectations of a faster pace of the US tightening pushed the Treasury yields higher across the curve, in turn, weighed down on the alternative risk assets such as the equities. On the other hand, the Antipodeans, the EUR, and GBP traded in the red zone, as the US dollar held steady near 8-day tops of 90.08 versus its main competitors.
Among the commodities, gold prices dropped nearly -0.50% to $ 1325 levels while WTI was down 1%, as a broadly stronger dollar offset a report of a drop in the US crude stockpiles.
Main topics in Asia
UK Treasury Select Committee to launch cryptocurrency inquiry - Reuters
The UK's Treasury Select Committee, a bipartisan group of MPs from both sides of the line, is set to begin an official inquiry into cryptocurrencies and blockchain technology, according to a UK statement.
UK Cabinet angered by Theresa May's Brexit strategy paper - The Telegraph
As reported by The Telegraph, Theresa May's official strategy document found no friends in the UK Parliament.
German finance ministry expects growth swing to continue - Reuters
The German Finance Ministry's latest monthly report shows incredibly bullish expectations; details via Reuters.
Nikkei tumbles back below 22,000.00 as markets pull back
Japan's leading Nikkei 225 Index is sinking as risk aversion takes hold of the Asian markets, testing 21,640.00 as of writing.
Fed's Kashkari - Fed should be patient, allow inflation to build
Fed's Kashakri's comments are crossing the wires via Reuters …
Fed's Kashkari - Aggressive rate hikes could push economy into recession
Fed's Kashkari is worried that aggressive interest rate hikes could invert the yield curve and tip economy into recession.
Key Focus ahead
Markets gear up for another eventful calendar ahead, with the speech by the FOMC member Quarles, eyed for further insights on the Fed’s rate hike prospects for this year. In the European session, the German Ifo business surveys and UK Q4 GDP second revision will offer fresh trading impetus to the EUR, GBP traders, as they await the ECB monetary policy meeting minutes for fresh cues on the bank’s tapering plans.
The NA session is also expected to remain busy, as the Canadian retail sales will be reported at 1330GMT. At the same, the US will report its weekly unemployment claims data, following which the Fed officials Dudley and Bostic will deliver their respective speeches. Also, of interest, will be the US EIA crude inventories report that is expected to provide fresh direction on oil prices.
EUR/USD - Down 2% from recent highs, but long-run bull outlook intact
The EUR/USD pair fell to 1.2265 in Asia - the lowest level since Feb. 12, tracking the post-Fed minutes rise in the treasury yields and the resulting widening of the US-DE two-year bond spread in the USD positive manner.
GBP/USD drooping under the weight of Brexit fears ahead of UK GDP figures
The UK will see GDP figures at 09:30 today, with median forecasts anticipating figures to come in at 1.5% for the headline figure, unchanged from the previous reading.
UK Q4 GDP to be confirmed at 0.5% q/q - Barclays
The Barclays Research Team offer a sneak peak on what to expect from today’s UK Q4 GDP second estimate due on the cards at 0930GMT.
Key Events Ahead
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Latest Forex News
Editors’ Picks
EUR/USD battles with 1.1700 as the market mood turns sour
Poor German data and renewed concerns about a default of the Chinese Evergrande property giant undermined investors’ sentiment, pushing them into the dollar’s safety.
GBP/USD accelerates its slump, trades around 1.3650
GBP/USD is under strong selling pressure, trimming most of its post-BOE gains. Concerns about the global financial health and slow moves towards tapering weigh on markets.
XAU/USD hangs near multi-week lows, around $1,745 ahead of Powell
Gold struggled to capitalize on its attempted intraday recovery move. Hawkish Fed/BoE, rising bond yields acted as a headwind for the metal. Resurgent USD demand exerted additional pressure on the commodity.
PBoC imposes ban on crypto trading as it fosters ‘illegal financial activity’
PBoC bans crypto trading activities and a plethora of associated services, labeling it “illegal.” Overseas cryptocurrency exchanges providing services to Chinese residents will be investigated in accordance with the law.
Evergrande, VIX and yields make for choppy day ahead
Equity markets remain focused on Evergrande as rumours of a possible default on overseas debt swirl. The market appears to be on the hunt for negative news, which leads us to conclude that stocks are going lower in the short term.