Asia FX Handover - Implied Vols Spike Ahead Of Trade Talks
Matt Simpson May 9, 2019 1:08 AM
A summary of news and snapshot of moves from today’s Asia session.
- 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).
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.