Yen May Continue Higher as Global Slowdown Fears Grip Markets

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TALKING POINTS – YEN, AUSSIE DOLLAR, STOCKS, US DOLLAR, RETAIL SALES

  • Yen up, Aussie and NZ Dollars down as stocks plunge in APAC trade
  • S&P 500 futures hint risk aversion likely to continue through week-end
  • US retail sales data may pass unnoticed with FOMC meeting in focus

The sentiment-linked Australian and New Zealand Dollars fell alongside stocks while the anti-risk Japanese Yen rose as investors’ mood darkened in Asia Pacific trade. An MSCI gauge tracking regional performance shed more than 1 percent.

Worries about slowing global growth appeared to be at work. The first wave of selling may have reflected a response to downbeat comments from the European Central Bank. Selling pressure as then compounded by a disappointing batch of Chinese economic data.

More of the same looks likely ahead. Bellwether S&P 500 futures are pointing sharply lower, suggesting the price action patterns witnessed in APAC trading hours have scope for follow-through into the end of the trading week.

US RETAIL SALES DATA MAY PASS UNNOTICED, FOMC IN FOCUS

A lackluster European data docket leaves the US retail sales report as the week’s last noteworthy statistical release. Headline receipts growth is expected to slow, but this may reflect little more than plunging crude oil prices. Indeed, stripping gas out of the equation is expected to reveal a pickup in sales elsewhere.

In any case, the figures are unlikely to have a meaningful impact on the US Dollar absent an improbably wild deviation from consensus forecasts. Traders are almost certainly focused on next week’s FOMC rate decision at this point, making them unlikely to show strong directional commitment in the interim.

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ASIA PACIFIC TRADING SESSION

Yen May Continue Higher as Global Slowdown Fears Grip Markets

EUROPEAN TRADING SESSION

Yen May Continue Higher as Global Slowdown Fears Grip Markets

** All times listed in GMT. See the full economic calendar here.

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