- Predictably, JPY is the strongest major and commodity currencies (AUD, NZD and CAD) are the weakest ahead of today’s trade talks. The Chinese Yuan suspiciously weakened across the board, which placed USD/CNH to its highest level this year.
- AUD/JPY and CAD/JPY nudged their way to new cycle lows whilst USD/JPY drifted to key support in a low volatility session. Still, markets don’t expect the calm to remain as JPY’s overnight implied volatility hit its highest level since 3rd January. Taking an average overnight implied volatility for FX majors, they’re the highest since the flash crash too.
- Despite US equities mostly shrugging off the tariffs, Asian equities traded broadly lower as Trump pledged to keep tariffs in place after claiming China ‘broke’ the trade’ deal. US futures have opened lower with the S&P500 E-Mini down -0.54%. Oil is coiling above $60 in a holding pattern, US10Y is slightly lower at 2.48%.
- On the data front, China’s CPI hit expectations at 2.5% YoY (highest since October) and PPI hit a 4-month high at 0.9% (0.6% expected).
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