The risk-off sentiment was the main underlying theme across the fx markets in Asia this Thursday, as the overnight Apple Inc warning-led “flash crash” moves shunned investors’ appetite towards the risk assets. The safe-haven Japanese Yen outperformed, rallying nearly 400 pips in a matter of seconds to reach the 105 level versus its American peer, with holiday-thinned markets having exaggerated the downslide. The spot managed to recover some ground during the Asian trades but faded the recovery on the 107 handle. The Yen crosses were the big movers, with the fear gauge, AUD/JPY down nearly 2.50% on the 74 handle while GBP/JPY attacks 134 handle once again, losing -2.25% on the day.
The Antipodeans were also hammered, with the losses accentuated in the Aussie, thanks to the massive drop in the AUD/JPY cross. The Kiwi consolidated the slide to 0.6591 level, but remained exposed to further downside risks. Meanwhile, the USD/CAD pair staged a solid comeback to the recent highs near 1.3650 region amid a fresh sell-off in oil prices. The Cable, on the other hand, remained well offered while the common currency benefited from the weakness in the US dollar, led by a sharp plunge in USD/JPY.
Main Topics in Asia
Breaking: USD/JPY drops more than 300 pips in minutes as risk aversion hits markets
Gold prices accumulate around the 2018 range’s 61.8% Fibo on flash crash risk flows
China Press: New stimulus measures being considered
BCC: UK services growth slumps to two-year low – Reuters
Oil recovering after broad-market risk run, WTI ticking into $46.00
Saudi Arabia may cut February heavy crude prices to Asia – Reuters survey
Singapore GDP ends 2018 on a weaker note – ING
Germany’s Altmaier: Brexit poses risk, but German economy poised for further growth
Asian stocks softly lower on through Thursday
Key Focus Ahead
Today’s EUR macro calendar remains relatively light, with the only UK construction PMI of note, to be reported at 0930 GMT.
Hence, the focus remains on the US macro releases, with the key ADP job numbers and ISM manufacturing PMI report on the cards 1315 GMT and 1500 GMT respectively. Also, in focus remains the US API weekly crude stocks data due at 2130 GMT.
EUR/USD trying to walk back previous day’s losses as EU CPI, US NFP loom ahead for Friday
Thursday brings a smattering of low-tier economic data for the European Union, but most traders will be buckling down for Friday’s mega-showing, with critical EU inflation figures due at 10:00 GMT “¦
GBP/USD rebounds stiffly into 1.2550, upside limited as sentiment remains half-cocked
Construction PMIs for the UK will be dropping at 09:30 GMT today, expected to slow further from 53.4 to 52.9, with US ISM Manufacturing (forecast 58.0, last 60.7) and Prices Paid data (forecast 57.9, last 59,3) for December slated for 15:00 GMT.
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