Risk Comes Under Pressure, Yuan Sell-Off Continues

Risk appetite was subdued as the dust settled after Wednesday's hawkish Fed monetary policy decision and a marathon of central bank decisions on "Super Thursday." Japan observed a public holiday, which came in between markets closures in Australia (Thursday) and New Zealand (Monday), limiting regional activity. Riskier currencies sold off as e-mini futures slipped into the red.

• The likes of USD, JPY and CHF capitalised on their safe-haven status, albeit yen volatility was very limited relative to Thursday, when Japanese authorities intervened in currency markets after the BoJ kept its ultra-loose monetary policy settings unchanged. Heightened risk of repeated intervention on Monday likely gave the yen an edge over its safe-haven peers.
• Selling pressure hit the Antipodeans, albeit nearby cycle lows in AUD/USD and NZD/USD remained intact. Regional risk barometer AUD/JPY was the big mover overnight, shedding ~45 pips through the session.
• Yuan depreciation showed no signs of exhaustion, despite the 22nd consecutive stronger-than-expected PBOC fixing. The mid-point of permitted USD/CNY trading band was set 838 pips below sell-side estimate, not enough to promote yuan recovery. Spot USD/CNH climbed to a new cyclical high (CNH7.1134), which may have had knock-on effect on the Antipodeans.
• Fed's Powell, SNB's Jordan, as well as ECB's Nagel & Kazaks will speak later on Friday. Data highlights include a slew of PMI readings and Canadian retail sales.