In recent days financial markets have been quite a few interesting events, especially the currency market. Here and today the people’s Bank of China unexpectedly showed the strongest since August last year, the devaluation of the yuan.
As you know, stocks, and other risky assets are very sensitive to the dynamics of the currency pair USD/JPY. As a rule, if the yen weakens, it is a signal for the bulls, unless, of course, the situation is not interfering with other important events, such as sudden movement of the Chinese currency.
On the eve of the Japanese yen has suspended its strengthening at the level of 106 yen per dollar and started correcting, but the mood on financial markets that has not improved.
And although the devaluation of the yuan outwardly looks so awesome, it’s really the strong depreciation during the last 9 months, that is since August of last year.
Of course, on this background falling today, and futures on American indexes, all indexes in Asia and, of course, the price of oil.
By the way, in recent days, the correlation between U.S. equity and exchange rate USD/JPY gave certain failure.
All this is very similar to a signal of market officials from the fed. Its meaning is that: stop hawkish talk, otherwise a recurrence of last August can not be avoided. Well, visually, the similarity really is, even though the market has almost never repeats, but still.
Oil prices
Well, the price of oil falling for the fourth consecutive session. Over the past few days the market began to receive information that does not contribute to the growth of oil prices. And it reported a record production by the OPEC countries in April, and on growth stocks in the United States.
In addition, on Tuesday released a portion of the extremely weak macroeconomic statistics, and traders took this as signs of a slowdown in demand for “black gold”.
