Yen geared for a rally - Morgan Stanley

Joshua Gibson FXStreet

Analysts at Morgan Stanley are warning that the Japanese Yen could be gearing up to stage a rally across the broader markets.

Citing ongoing risk aversion from Brexit, as well as a steady breakdown of global liquidity conditions dragging down risk assets. With sovereign bond yields also declining, which MS says will start to draw investors away from the USD 'carry' trade.

With global market risks continuing to rise, and an unattractive USD carry, the Yen could see a broad-market gainer as market flows back out of the US Dollar.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

AUD/USD turns south toward 0.6900 as USD firms up

AUD/USD sees fresh selling and drops toward 0.6900 in late Asian trading on Monday, as renewed US Dollar strength weighs on the pair amid lingering Middle East and Russia-Ukraine geopolitical tensions. Focus remains on Oil prices, Treasury bond yields, and RBA expectations for fresh trading impetus in the major.

USD/JPY retakes 158.00 amid hawkish BoJ bets, firmer USD

USD/JPY erases losses and retakes 158.00 in the Asian session on Monday, trading within a one-week-old range. Geopolitical uncertainty continues to underpin the US Dollar, despite fading Fed rate hike hopes, supporting the pair's rebound. However, further upside could be capped by hawkish BoJ expectations and looming intervention risks that could support the Japanese Yen.

Gold flirts with $4,100, four-day lows

Gold adds to Friday’s losses and comes closer to the key $4,100 mark per troy ounce at the beginning of the week. The yellow metal’s retracement comes in response to the persistent advance in the US Dollar in combination with the resurgence of the upside momentum in US Treasury yields across the curve.

Crypto Today: Bitcoin rally slows while Ethereum and XRP extend recovery amid slowing ETF inflows

Bitcoin is narrowly consolidating while trading above $86,000 at the time of writing on Monday. Altcoins, on the other hand, show a positive outlook, with Ethereum edging higher above $2,700 while Ripple steadies above $1.52.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.