Search ForexCrunch

Mikael Olai Milhøj, senior analyst at Danske Bank, notes that the global markets shrugged off the new trade-related uncertainty in the previous US session.

Key Quotes

“The initial volatility spike and risk-off spot moves across vix, S&P500, yen, yen vol and many other market indicators was seemingly seen as a buy-the-dip, reversing some of the initial reaction.”

“We have highlighted the increased uncertainty from these new developments and hence view yesterday’s reversal in pricing as rather complacent. Though markets might be trying to call the bluff of Trump, we are less certain. As such, we expect elevated volatility in USD/JPY and related China-linked currencies. Tracking if China sends delegates to the US and if Trump really implements these new tariffs on Friday are so far the two main drivers of risk to watch.”