Article Highlights

  • China’s banks still on Golden Week holiday
  • GBP crashes amidst thin liquidity
  • Japan’s average cash earnings (y/y) slips by 0.1% vs. 0.5% expected, 1.2% previous
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Geronimoooooo!!! The pound was the biggest loser in today’s Asian session trading, as it fell to record lows against its major counterparts in just a few minutes.

Major Events:

GBP flash crash – The pound was clobbered across the board at the start of the Asian session, falling to notable lows against its major counterparts in a matter of minutes. That’s the fastest decline since the actual Brexit vote, yo!

There’s still no official story behind the crash, but many are pointing to French President Francois Hollande pushing for tough penalties for a Brexit as a possible reason. If you recall, U.K. PM Theresa May has recently started the clock on the process last weekend, saying that Article 50 would be invoked by no later than the end of March 2017.

Meanwhile, others believe that the crash was a technical glitch brought on by a combo of thin liquidity and stop losses getting triggered. What do you think?

More BOJ easing on the table? – Since Japan has no Brexit-grade catalyst to push its domestic currency lower, its officials had to settle for a bit of jawboning.

Earlier today Etsuro Honda, advisor to PM Shinzo Abe, called for most easing from the Bank of Japan (BOJ), and said that a more aggressive fiscal policy is needed to help the central bank. Then, the BOJ Governor Kuroda himself hit the newswires and said that he doesn’t think that the BOJ has reached its limits when it comes to easing.

Major Market Movers:

GBP – Sterling was pounded (pun intended) across the board at the start of the Asian trading session.

GBP/USD fell to 1.1485, the lowest since March 1985, before settling with a 186-pip loss (-1.48%) to 1.2430. Ditto for GBP/JPY, which fell to 123.66 before capping the session with a 226-pip loss (-1.72%) to 129.02 and EUR/GBP, which hit its 7-year highs at .9359 before settling back down to .8942 (-1.18%).

JPY – Risk aversion over the pound’s flash crash spilled over to the yen crosses, though losses were limited by a bit of jawboning from Japan’s officials.

USD/JPY is down by 27 pips (-0.26%) to 103.80, EUR/JPY is down by 67 pips (-0.58%) to 115.36, and AUD/JPY is down by 30 pips (-0.38%) to 78.64.

Watch Out For:

  • 5:00 am GMT Japan’s leading indicators (101.7% expected, 100.0% previous)
  • 6:00 am GMT: German industrial production (1.1% expected, -1.5% previous)
  • 6:45 am GMT: French government budget balance
  • 6:45 am GMT: French industrial production (0.7% expected, -0.6% previous)
  • 6:45 am GMT: French trade balance (-4.3B EUR expected, -4.5B previous)
  • 7:00 am GMT: Switzerland’s foreign currency reserves
  • 7:30 am GMT: U.K.’s Halifax house price index (0.0% expected, -0.2% previous)
  • 8:30 am GMT: U.K. manufacturing production (0.4% expected, -0.9% previous)
  • 8:30 am GMT: U.K. goods trade balance (-11.1B GBP expected, -11.8B GBP previous)
  • 8:30 am GMT: U.K. industrial production expected to remain at 0.1%

See also:

U.S. Session Recap
London Session Recap

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