Equities Take a Bruising, Prompting Flight to Haven FX

Risk appetite took a knock early Monday, with European stock markets off 2.5 - 3.2% as financials lead losses. A deluge of files released by the ICIJ this weekend (dubbed the FinCEN Files) has knocked the financials sector hard, with reports suggesting banks including Deutsche Bank, Barclays and HSBC had engaged in suspicious activity and illicit fund transactions. Whether the release leads to a firm response from regulators remains to be seen, but bank stocks are trading with losses of as much as 6.5%.

This has led to flight to quality in currency markets, with JPY, CHF and USD benefiting at the expense of NOK, GBP and the EUR.

GBP may take more focus throughout the Monday session, with the UK's chief scientific advisors scheduled to make a statement to press at 1100BST/0500ET that is expected to contain a stark warning that the UK COVID spread has reached a tipping point - and a material worsening could lead to further crackdowns on social activity. GBP/USD has traded with losses as large as 100 pips already Monday.

The schedule is quite Monday, with just Chicago Fed National Activity Index on the docket. Speakers list is longer, with ECB's Lagarde & Holzmann and Fed's Brainard due to speak.