This gave the market a little wobble on Friday: US considering limits on US portfolio flows into China)
Goldman Sachs had thoughts on it (posted earlier), yen positives:
Deutsche Bank expand a little:
- policy risks reciprocity from China
- China is a much bigger player in U.S. portfolio markets, than the U.S. is in China
- headlines like this also suggest that U.S.-China relations remain extremely tense
- not a great sign on the state of the trade negotiations
- These headlines help assets that do well in `risk-off' like gold, Swissie and yen.
- The euro likely also benefits in part as China could in theory search for alternative liquid markets
- "One important caveat to above is we need to see if these are just loose headlines with U.S. capital flows used as a bargaining chip, or whether the threat is real."
Meanwhile, Asia FX is subdued at the new week's opening.
