Here is what you need to know on Tuesday, August 27th:
– Risk aversion that dominated the first part of the day suffered a U-turn with comments from US President Trump. The dollar recovered, safe-haven assets gave up, and equities also bounced. Nevertheless, Hu Xijin, editor-in-chief of the Global Times, tweeted that “based on what I know, Chinese and US top negotiators didn’t hold phone talks in recent days. The two sides have been keeping contact at a technical level, it doesn’t have significance that President Trump suggested. China didn’t change its position. China won’t cave to US pressure,” somehow denying Trump ´s words. The market ignored it.
– UK PM Boris Johnson said that the UK could “easily cope” with a no-deal Brexit, and blamed the EU for a possible no-deal scenario. Once again, he said that the “backstop has got to come out,” and that the EU needs to come out with a solution while ramping up preparations for a no-deal.
– USD/JPY bounced from a multi-year low of 104.44, but the recovery fell short of affecting the dominant bearish trend.
– Commodities closed the day unchanged when compared to Friday’s close. It seems that the latest risk-related development had left investors clueless once again.
– Cryptocurrencies edged marginally higher, trimming early losses. No fireworks there.