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FOREX: JPY Recoups Lost Ground, Softer Equities Drain Risk Appetite

FOREX
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  • JPY is on the front foot early Friday, with the currency undergoing a small corrective recovery after Thursday's acute sell-off. As a result, USD/JPY has faded back below Y157.00 to mark a 100 pip gap with the cycle high posted yesterday. We wrote yesterday that while the Thursday price action strongly resembled the USD/JPY rally prior to the April intervention, official intervention to stem losses is unlikely at this stage - given the the rally was underpinned by the confluence of the Fed and BoJ.
  • CHF is similarly firm, improving alongside the JPY, while equity sentiment remains poor. Core European indices are lower by 1% or more, with Germany's DAX a particular source of weakness; off 1.3%. US equity futures are similarly weak, with the e-mini S&P showing below the overnight low as well as the post-Fed low ahead of the NY crossover.
  • The greenback is flat-to-lower, with markets look ahead to the first post-Fed decision commentary from Daly and Williams - who both appear on television later today.
  • Focus for the session ahead turns to personal income and spending stats for November as well as the core PCE price index numbers - making for the final major US release before the holiday break. The final Michigan sentiment stats are also set to cross. October retail sales from Canada are also due, seen improving on the headline, but deteriorating on the ex-Autos figure.
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  • JPY is on the front foot early Friday, with the currency undergoing a small corrective recovery after Thursday's acute sell-off. As a result, USD/JPY has faded back below Y157.00 to mark a 100 pip gap with the cycle high posted yesterday. We wrote yesterday that while the Thursday price action strongly resembled the USD/JPY rally prior to the April intervention, official intervention to stem losses is unlikely at this stage - given the the rally was underpinned by the confluence of the Fed and BoJ.
  • CHF is similarly firm, improving alongside the JPY, while equity sentiment remains poor. Core European indices are lower by 1% or more, with Germany's DAX a particular source of weakness; off 1.3%. US equity futures are similarly weak, with the e-mini S&P showing below the overnight low as well as the post-Fed low ahead of the NY crossover.
  • The greenback is flat-to-lower, with markets look ahead to the first post-Fed decision commentary from Daly and Williams - who both appear on television later today.
  • Focus for the session ahead turns to personal income and spending stats for November as well as the core PCE price index numbers - making for the final major US release before the holiday break. The final Michigan sentiment stats are also set to cross. October retail sales from Canada are also due, seen improving on the headline, but deteriorating on the ex-Autos figure.