Markets still prefer to sell risk rallies -...>

FOREX: Markets still prefer to sell risk rallies

- JPY was bid throughout the session, initially gaining on the cancellation of

Seven & I's $22bln deal to buy Marathon's Speedway gas stations. Markets were

forced to discount the M&A flow, marking USD/JPY well below the week's lows at

Y106.86. This dictated direction for the rest of the session, as equities

returned into the red and the EuroStoxx Bank Index entered a bear market.

- Having outperformed for much of the week after the RBA rate cut, AUD returned

lower Thursday as risk sentiment soured and the S&P500 sank as much as 3%. The

week's lows in AUD/USD, however, remain in tact. The USD also suffered, with a

lower, flatter yield curve sapping any strength from the USD index. Data was

ineffectual, keeping focus on the economic fallout of the Coronavirus outbreak

in Western Europe and the US.

- Nonfarm payrolls takes focus Friday, with the US expected to have added 175k

jobs across February. Australian retail sales, German factory orders and the

Canadian jobs numbers are also due. Ahead of the Fed media blackout period,

Kashkari, Williams, Evans, Mester, George and others are all due to speak.