Further EM FX weakness is stepping up a gear and that’s the cold the others are catching

USD vs TRY, ARS, MXN, ZAR to name a few are all on highs. That’s bring some nerves to the majors which is why we’re seeing moves into USD, CHF and JPY.



USDARS is one I’ve been watching with morbid curiosity after hearing yesterday that the Argentine central bank was had $5bn on the offer at 25.00. They seem to be winning so far but the market loves a target and especially a central bank on the wrong side of trying to protect its currency. I wonder if Georgie S is lurking about? ?

We’re also seeing bond yields elevated across the majors too. US 10’s are flirting with new highs around 3.03%. Oil is up but gold is down which is another sign that this risk-off is slightly different.

USDJPY has broken through 110.00 and my short this morning is stopped and I’m reversed into a long at 110.05. Tight stop there too just under the 109.80 level.

This all makes a bit of a mess of things with US retail sales due soon but it gives us a potential trade to fade the data if it takes prices out of sync with these current moves. The moves were seeing now are part of far greater longer-term flows than what one piece of volatile data should effect.

Ryan Littlestone

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