Market spiral shows no sign of reversing -....>

FOREX: Market spiral shows no sign of reversing

- A notable session across asset classes as the tumbling oil price knocked

considerable value off markets worldwide. Markets across core Europe entered

bear market territory, falling at the fastest rate since the Global Financial

Crisis as energy and financials led the way lower. The main beneficiaries across

currency markets remain the JPY and CHF. Nonetheless, both currencies saw

whipsaw trade close to their respective session highs, which may suggest

official involvement in both exchange rates.

- Oil- and growth-tied FX bore the brunt of the sell-off, resulting in NOK and

MXN hitting historic lows against the USD. RUB will presumably follow suit when

markets re-open Tuesday.

- Currency hedging markets have taken note, with options traders now marking up

the highest hedging costs for JPY, EUR and CHF for years. The premium for EUR

calls over puts is now at EUR-era record highs.

- Chinese inflation and French industrial manufacturing production data are the

calendar highlights Tuesday. There are no central bank speakers of note.