It seems this market is very scared of bouncing
First thing this morning I was on the look out for some sort of bounce in risk after the moves of the last couple of days. That did happen for most of the morning but it's all turned sour again.
European stocks are being hammered with banks the usual worries. Deutsche Bank is never far from the news and they're in the thick of it today. Aside from structural worries it's being touted that they may be shown the fast exit door from the Stoxx index if their ranking has drops below the membership criteria for two months on the spin. Credit Suisse is also facing the boot. DB is ranked 74th with CS 68th, down from their respective 85th & 85th in May. They need to be 74th or higher to keep their places.
In FX, the yen is in demand just now and we're seeing that effect in yen pairs. USDJPY has gone through the overnight low to 100.40 and EURJPY has dipped under 111.00 to 110.93.
GBPUSD has made it clear that 1.30 is where the bigger sellers lie but no one is really ready to have another go at the downside right now so 1.2920 is support ahead of the big figure.
AUDUSD is trying to claw its way back up from the 0.7408 low. I'm now out of my shorts in this move. I may look again if we get up to 0.7500. A break of 0.7470/75 will likely bring that into play.
Japanese bond yields aren't having the best of times (par for the course in bond markets right now). 20's dropped below zero and 10's hit a new low yield. A Japanese Ministry of Finance official has just popped up to say they are closely watching market moves for whether they are speculative. That's being ignored by yen traders.
German yields are suffering also across the curve. 10's touched -0.205%. 2's hit a new record at -0.69%. More and more is dropping off the ECB shopping list.
The move in bonds is a sure sign of the markets mood regarding not only interest rates (see US Treasuries) but also that growth isn't all it's cracked up to be. Throw in Brexit too and that seems to have made the cracks under the wallpaper clearer.
We have the minutes from the FOMC later today and that's unlikely to help matters either.
