 After suffering yesterday's deeper selloff, there's hope for some stabilization and recovery in US stocks. Investors are cheering US CPI miss as DOW futures pare back some of earlier losses. The greenback, on the other hand, is suffering refreshed selling after the release. Japanese yen follow as the second weakest one as it could take advantage on global risk aversion. As for today, Australian Dollar and New Zealand Dollar are the strongest ones. The US CPI miss might add some bullets for Trump to harass the Federal reserve for rate hikes. But it should be reminded that even with a strong economy and record low unemployment, core inflation is kept close to target. Fed, the committee of seasoned central bankers, and the hundreds of economists and staff working in all the branches, have done a marvellous job. Anyone with a little bit of decency will just let these professionals continue with their work. European stocks stay weak though. At the time of writing, DAX is down -0.66%, CAC down -1.43%, FTSE down -1.31%. Italian 10 year yield is rising 0.055 at 3.559. German 10 year yield is down -0.035 at 0.522. German-Italian spread is hovering slightly above 300 handle. Earlier in Asia, Nikkei lost -3.89% to 22590.86. Singapore Strait Times lost -2.69% to 3047.39. Hong Kong HSI fell -3.54% to 25266.37. China Shanghai SSE dropped -5.22%, to close at 2583.46, breaking key support level of 2638.3 (2016 low). Technically, Dollar's selloff against European majors and Yen will likely continue for a while. The question is whether commodity currencies would have that sustainable buying in the overall risk averse environment. In particular, USD/CAD retreats mildly but it's still in proximity to 1.3081 resistance Firm break there will be a strong sign of bullish reversal in the pair. |
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