TALKING POINTS – YEN, AUSSIE DOLLAR, EURO, TURKEY, STOCKS
- Yen higher, Aussie Dollar down amid Turkey-driven risk aversion
- Euro[1] remains on the defensive against leading regional alternatives
- Sentiment meltdown might slow after Asia Pacific trading session
The anti-risk Japanese Yen[2] outperformed while the sentiment-linked Australian Dollar[3] suffered outsized losses as Asia Pacific markets took their turn to react to Friday’s bloodletting in European and US trade. The similarly cycle-sensitive New Zealand and Canadian Dollars also faced selling pressure.
The Euro remained on the defensive as the central point of concern for investors continues to be the potential for spillover from Turkey’s financial crisis into the Eurozone[4]. Not surprisingly, top regional alternatives like the Swiss Franc[5] and the British Pound[6] found support in the single currency’s troubles.
Looking ahead, a barebones offering of European and US economic data is unlikely to pull the markets’ attention away from sentiment trends. Futures tracking the FTSE 100[7] and S&P 500[8] are looking decidedly morose before London and New York come online, hinting at continued risk aversion ahead.
Still, it ought to be said that at least some of the negativity on display in the APAC session reflects a drive to catch up to developments that European and North American investors have already traded. That might imply the ominous cues in index futures are overstated, implying less scope for near term follow-through.
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ASIA PACIFIC TRADING SESSION
EUROPEAN
