Risk Sentiment

As AUD/JPY is a classic barometer of risk, we should take note that all is not looking well around current levels. And if AUD/JPY tanks, it’s likely to be followed by risk in general.

Another week, another record high for gold. And another start to the week where I am asking myself “when is this rally going to top?”. While new highs are eventually favoured, a small pullback may not hurt first.

Earlier this month I had warned that the fall on USD/JPY from the July high might already be a crowded trade. A plunge in open interest and an engulfing week on yen futures suggests I was right to be suspicious.

Following tense weekend talks, UBS has agreed to purchase Credit Suisse by the end of the year for Fr 3 billion ($4.5 billion).

There’s a subtle yet big difference between ‘risk-off’ and ‘de-risking’, in that the latter means investors also offload their safe havens as they flock to the safety of cash.

The strong dollar and lockdowns in China have continued to see traders take a bearish stance on metals over the past four weeks.