Flight To Safety

Risk sentiment soured as the three main U.S. e-mini futures contracts retreated, shedding ~1% apiece. There were no particular headline catalysts behind the defensive moves, with yesterday's spell of reprieve for risk seemingly running its course. The proximity of a key address from Fed chief may have helped fray the nerves of market participants.

• Traditional safe havens gained on the back of general aversion to risk, with the yen sitting atop the G10 pile. Spot USD/JPY has shed some 50 pips thus far after refreshing its 24-year highs in early Tokyo trade.
• The Antipodeans paced losses, closely followed by their commodity-tied peers CAD & NOK. Retreating crude oil and iron ore prices amplified selling pressure that weighed on the space.
• Regional risk barometer AUD/JPY fell 1 full figure, but struggled to return below Y94.00 or challenge Tuesday's lows.
• Greenback strength drove spot USD/CNH higher, with a weaker than expected PBOC fix facilitating the move. The People's Bank set the mid-point of permitted USD/CNY trading band 27 pips above sell-side estimate, which represented the weakest bias in two months.
• On the data front, UK & Canadian inflation figures take focus from here. Elsewhere, Fed Chair Powell will deliver his semi-annual monetary policy testimony today. His address provides the highlight of the global central bank speaker slate, which also features Fed's Barkin, Evans & Harker, BoE's Cunliffe & BoC's Rogers.