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US Session: Don't Panic, just buy the Yen

The theme over the US session was a pile of disappointments on a whole.
Major data releases from the US came in below expectations with Retail Sails reading down 0.3% and PPI arriving 1.6% vs 1.8% expected sending the dollar lower again. The stock market was then a painful time from the off for those hoping to trade their way back to the upside.

The S&P was losing over 2pct by the close while the DJIA had collapsed almost 500 points early session before recouping back some ground. The FX Space today came with big moves at panic stations with the Yen a sure bet falling back to test the 105 handle, a bumpy ride in sterling trades and the euro making haste to the upside and marking weekly highs.

EUR/USD was only eventful on the US side of events with Draghi not adding anything new in his introductory speech to a non-eventful press conference. The Beige book mainly informed us that wage growth has been modest. The pair was bid from 1.2640 until meeting supply at 1.2800 with a spike up to 1.2887 to then holding in at 1.2750/60 for another surge through the handle again until the pair consolidated at 1.2840.

GBP/USD, relatively uneventful in the European session on the back of the UK employment figures that came without any shocks, eventually picked up in the US session. It was a bumpy ride as can be expected from this pair amongst volatility in global markets. The flows finally began to calm and sterling settled on the bid through the 1.60 handle after moving between a range of 1.5874 / 1.6070.

USD/JPY was pretty much a one way story again, dropping through the supporting 107 handle and bouncing back from 105.19 into the 106 territory and resisted at 106.40 before supply came in back onto 106. The pair was then resisted again at the 106.20 zone with the Japanese currency maintaining and finishing up with its safe haven status.

Key Events:

Producer Price Index (YoY) (Sep) arrived 1.6% vs 1.8% and previous 1.8%

Retail Sales (MoM) (Sep) arrived -0.3% vs -0.1% and previous 0.6%

Monthly Budget Statement (Sep) $106.0B vs $80.9B and prev' $-129.0B

ECB President Draghi's Speech

FED's Beige Book

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