Credit AgricoleAsia overnightEven though oil prices remain in retreat, rising US inflation and the news-flow on the Ukraine crisis kept risk on the back foot. News that several Chinese companies will be forced by the US government to de-list from US bourses added to the negative sentiment of stocks in Mainland China and Hong Kong. Most Asian bourses were trading lower and S&P500 futures slightly in the red at the time of writing. In G10 FX, the USD remains a beneficiary of fragile sentiment, but the EUR and NOK were modest outperformers in the Asian session. The JPY was the big underperformer in the Asian session.CitiEuropean OpenUSDJPY pushed higher through Asia hours printing at the highest levels since 2017, on the heels of real money interest and demand for topside seen overnight. While our spot desk didn’t see much behind it, they have been looking for a run higher with the pair now breaking above the potentially key 116.40/60 level. USD extended overnight gains with Europe and US readying more sanctions against Russia. Price action was overall choppy in G10 with the market fatigue highlighted by the dwindling volumes. Treasuries firmed with a grab for yield evident after 10y got to 2% and 30y to 2.40%. USDAsia ticked higher. Tech-FXstruggles with outflows after Nasdaq led slide post US-CPI on Thursday. CNH and HKD both fell as domestic stock shakeout and rising Covid cases weigh.Looking ahead, European FX remains glued to developments around Ukraine/Russia while EU heads of state are due for another day of meetings in France, with arrivals from 09:00 GMT. UK sees the release of January GDP while later US President Joe Biden is due to speak on Russia. CAD will see an employment print, the US sees University of Michigan sentiment data. In EM, we look to TRY CA balance, MXN IP data and BRL inflation prints.While there’s been little market response, sanction pressure on Russia continues. EU statement released in the early hours following the meeting in France says they are “determined to increase even further our pressure” and “remain ready to move quickly with further sanctions.” Bloomberg reports that US President Joe Biden is set to call for an end to normal trade relations with Russia, making room for increasing tariffs on Russian imports, citing people familiar. President Biden is due to speak on Russia at 15:15 GMT.
Source: Tickmill
