 Risk aversion stays in the global financial markets today but it's not in the most intense state yet. A trigger for selloff in stocks and decline in yield is China's threat to squeeze supply of rare earths to the US as part of a countermeasures in trade war. However, it's also widely know that Japan has discovered huge source of rare earths last year that could act as semi-unlimited supply to the whole world. Hence, the impact of China's move is highly doubtful. Though, it's for sure that US-China trade war is going to drag on longer, much longer. In the currency markets, Swiss Franc and Yen are so far the strongest ones for today. In particular, more upside is in favor in both, following free fall in treasury yields. US 10-year yield has realistic chance of breaking 2.2 handle in the very near term. For now, Australian Dollar is the third strongest, rather unmoved by risk aversion. On the other hand, New Zealand Dollar is the weakest one. Euro follows as European Commission is said to have sent the formal warning letter to Italy on its budget deficit already. Canadian Dollar is mixed, awaiting BoC rate decision and statement. Technically, EUR/JPY and GBP/JPY are both extending recent decline. It's now time for USD/JPY to follow with a break through 109.02 support. USD/CAD's rally attempt is limited by 1.3521 resistance so far. This level will be closely watched to confirm up trend resumption. In Europe, currently, FTSE is down -1.56%. DAX is down -1.49%. CAC is down -1.95%. German 10-year yield is down -0.004 at -0162. Earlier in Asia, Nikkei dropped -1.21%. Hong Kong HSI dropped -0.57%. China Shanghai SSE rose 0.16%. Singapore Strait Times dropped -0.06%. Japan 10-year JGB yield dropped -0.0229 to -0.094. | 
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