Volatility continues to hit the market as the US stock markets once again took a hit after yet another government protectionist announcement. This time, we heard from Commerce Secretary Wilbur that the US will look to announce restrictions on Chinese investors from buying into sensitive US technology stock. The market reacted in predictable fashion with the NASDAQ finishing the day down 2.93% and the S&P 500 nearly 2.8%. In the currencies, the JPY crosses once more retreated as investors bought back into the safe haven yen and with the Nikkei futures predicting an open of -400 points there is probably further downside potential in those pairs as we move into the Asian session.
Elsewhere in the markets, the sterling took a hard knock as month end flows combined with a negative Brexit statement from the BoE to take cable down from nearly 1.4250 to 1.4070 in short order. Euro also came under pressure from those same dollar buying month end flows and comments from the ECB’s Makuch which continued with the recent more dovish rhetoric. The AUD once again is challenging recent lows under 0.7700 as risk appetite comes off and commodities once more look vulnerable.
Looking ahead to today’s trading and at the risk of sounding like a broken record there will be more of the same. There’s little in the way of fundamental data releases until we hit the New York session and the latest US GDP numbers, so traders will be focusing on the general risk sentiment and watching the news wires closely for the next update to change it.