In Asia, the Nikkei is bleeding by 5% currently. Mainland Chinese stocks are still holding up but we’re in the lunch break now. This is keeping the risk mood on the defensive as we look towards European trading later. Amid the yuan devaluation and funding stress in markets, risk trades will find it tough to seek out any reprieve unless tariff headlines turn for the better.
At this point, the next key risk event to watch in broader markets is the 10-year Treasury auction later at 1700 GMT. That as the basis trade implodes and yields are surging higher, with the weak 3-year notes auction yesterday here not helping.
This article was written by Justin Low at www.forexlive.com.
