MNI China Daily Summary: Friday, April 26

MNI BRIEF: China, US Should Strengthen Dialogue, Cooperation

MNI BRIEF: SNB Framework Reform 'Playing With Fire' - Steiner

MNI: PBOC Conducts CNY2 Bln Via OMO Fri; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS FRI

MNI: PBOC Sets Yuan Parity Lower At 7.1056 Fri; -4.56% Y/Y

MNI: BAKER HUGHES US RIG COUNT 613; OIL RIGS 506; GAS RIGS 105

MNI: UNIV OF MICHIGAN CONSUMER SENTIMENT FINAL APR INDEX 77.2

EZ/UK T-Bill Calendar: Germany, France Auction on Monday

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Volatility Spike Fades as Israel Strike Seen as Limited in Nature

FOREX
Homepagemarkets-real-timeBulletMarketsFixed Income BulletsForeign Exchange Bullets
  • Markets underwent a significant volatility spike overnight on Friday, as news that Israel had launched missile strikes on Iran underpinned concerns of renewed geopolitical risk in the Middle-East. Risk sold off sharply, putting the USD on the front foot, equities lower and the JPY markedly higher. Emerging markets currencies came under particular pressure, with the MXN among the most exposed to stop-loss selling to send the USD/MXN pair briefly higher by 6.7%.
  • The market impact didn't stick, with the missile strike appearing limited in nature and closer to a warning shot rather than a declaration of protracted hostilities. As such, markets bottomed out to put USD/JPY ~80 pips above the overnight low and the greenback comfortably below the overnight highs.
  • Headed into the NY crossover, markets are more sanguine. CHF is the firmest currency in G10, prompting another multi-month high in CHF/JPY. We wrote yesterday that this week's constructive price action in the cross turns focus to recent highs at 170.81. Japanese intervention risks naturally remain a concern for fresh longs, however the still historically low levels of realised vol in JPY could calm these concerns (one-week realised vols remain ~3 points below the rolling 12m average).
  • There are no notable data releases set for Friday, keeping focus on the central bank speaker slate. BoE's Ramsden makes an appearance for the first time in 2024, while Fed's Goolsbee, ECB's Nagel and BoE's Mann follow.
231 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • Markets underwent a significant volatility spike overnight on Friday, as news that Israel had launched missile strikes on Iran underpinned concerns of renewed geopolitical risk in the Middle-East. Risk sold off sharply, putting the USD on the front foot, equities lower and the JPY markedly higher. Emerging markets currencies came under particular pressure, with the MXN among the most exposed to stop-loss selling to send the USD/MXN pair briefly higher by 6.7%.
  • The market impact didn't stick, with the missile strike appearing limited in nature and closer to a warning shot rather than a declaration of protracted hostilities. As such, markets bottomed out to put USD/JPY ~80 pips above the overnight low and the greenback comfortably below the overnight highs.
  • Headed into the NY crossover, markets are more sanguine. CHF is the firmest currency in G10, prompting another multi-month high in CHF/JPY. We wrote yesterday that this week's constructive price action in the cross turns focus to recent highs at 170.81. Japanese intervention risks naturally remain a concern for fresh longs, however the still historically low levels of realised vol in JPY could calm these concerns (one-week realised vols remain ~3 points below the rolling 12m average).
  • There are no notable data releases set for Friday, keeping focus on the central bank speaker slate. BoE's Ramsden makes an appearance for the first time in 2024, while Fed's Goolsbee, ECB's Nagel and BoE's Mann follow.