(MENAFN- DailyFX) Talking Points:
Yen gains as BOJ, Deutsche Bank drive broad-based risk aversion Brexit-linked news flow pulls Pound into wider risk on/off dynamics Comments from ECB";s Draghi, Fed officials compound negativity The Japanese Yen outperformed in overnight trade as stocks slumped in Asian trade, offering support for the anti-risk currency. The deterioration in investors"; mood began to gain momentum after a speech by Bank of Japan Governor Haruhiko Kuroda. The central bank head said pushing the interest rate on excess reserves deeper into negative territory will be the main tool to increase easing under the BOJ";s new policy regime. The markets have been skeptical of the approach since it was introduced earlier in the year. News out of Germany compounded risk-off dynamics. Chancellor Angela Merkel ruled out state assistance for Deutsche Bank and refused to lobby on the lender";s behalf with US regulators ahead of elections in 2017, according to a report from Focus magazine. The US Justice Department may seek as much as $14 billion in sanctions linked the involvement of Deutsche";s MBS arm in the US mortgage crisis that triggered the Great Recession in 2008. Interestingly, the British Pound suffered outsized losses alongside the typically sentiment-geared Australian, Canadian and New Zealand Dollars as European shares followed Asian bourses downward. A number of Brexit-related headlines emerged over the weekend which may have contributed to a broadly toxic environment and pulled Sterling into risk on/off dynamics. Perhaps most notably, a survey from KPMG said three-quarters of large companies now plan to relocate some or all UK-based operations. Looking ahead, a steep slump in S & P 500 futures ahead of the opening bell on Wall Street hints the dour mood aims to carry forward. Negativity may be compounded if the day";s Fed-speak mimics the hawkish posture of Chair Yellen, who all but promised tightening in December. References to Brexit";s negative knock-on effects on Eurozone growth in a speech from ECB President Draghi may also damage confidence. What do retail traders buy/sell decisions hint about on-coming market trends? Find out here! Asia Session GMT CCY EVENT ACT EXP PREV 21:45 NZD Trade Balance (AUG) -1265m -735m -433m 21:45 NZD Exports (AUG) 3.39b 3.60b 3.96b 21:45 NZD Imports (AUG) 4.65b 4.30b 4.40b 21:45 NZD Trade Balance 12 Mth YTD (AUG) -3131m -2675m -3034m 23:50 JPY BOJ Flow of Funds - - - 05:00 JPY Leading Index CI (JUL F) 100.0 - 100.0 05:00 JPY Coincident Index (JUL F) 112.1 - 112.8 05:30 JPY BOJ Kuroda Speaks in Osaka - - - European Session GMT CCY EVENT EXP/ACT PREV IMPACT 08:00 EUR German IFO - Business Climate (SEP) 109.5 (A) 106.3 Medium 08:00 EUR German IFO - Current Assessment (SEP) 114.7 (A) 112.9 Medium 08:00 EUR German IFO - Expectations (SEP) 104.5 (A) 100.1 Medium 08:00 CHF Total Sight Deposits 517.2b (A) 516.7b Low 08:00 CHF Domestic Sight Deposits 516.7b (A) 438.7b Low 08:00 EUR Italian Retail Sales (MoM) (JUL) -0.3% (A) 0.3% Low 08:00 EUR Italian Retail Sales (YoY) (JUL) -0.2% (A) 0.8% Low 08:30 GBP BBA Loans for House Purchase (AUG) 36997 (A) 37672 Low 09:30 CHF SNB's Jordan Speaks in Geneva - - Low 12:30 EUR ECB Adviser Angeloni Speaks in London - - Low 13:15 EUR ECB's Coeure Speaks in Rome - - Low 13:45 EUR ECB Publishes Weekly QE Details - - Low 13:50 GBP BOE Bond-Buying Operation Results - - Low 14:00 EUR ECB";s Draghi Speaks at EU Parliament - - Medium Critical Levels CCY Supp 3 Supp 2 Supp 1 Pivot Point Res 1 Res 2 Res 3 EUR/USD 1.1126 1.1173 1.1200 1.1220 1.1247 1.1267 1.1314 GBP/USD 1.2644 1.2817 1.2891 1.2990 1.3064 1.3163 1.3336 --- Written by Ilya Spivak, Currency Strategist for DailyFX.com To receive Ilya's analysis directly via email, please SIGN UP HERE Contact and follow Ilya on Twitter: @IlyaSpivak
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