Late dollar drop sets up risk assets -........>

FOREX: Late dollar drop sets up risk assets

- After being sold sharply into the close Wednesday, equities bounced

convincingly as risk got some support from early headlines suggesting the top

China and US trade officials are to speak as soon as next week. The opening-up

of relations was read as a positive, translating into a softer greenback and

JPY.

- A sharp decline in short-end Treasury yields helped fuel a further rally in

risk later in the day, particularly as Fed fund futures (briefly) priced in a

negative Fed interest rate in 2021. As a result, AUD, CAD and NZD were at the

top of the G10 table.

- Elsewhere, the Norwegian and Czech central banks unexpectedly cut rates by

large margins, prompting initial weakness in the NOK and CZK respectively. 

- Friday will be a curious session, with UK and French markets closed for

business while the US report what's expected to be the worst Nonfarm Payrolls

report on record. Thursday's initial jobless claims were further testament to

the fragile economic situation in the US.