Risk Aversion Unsettles Equities and Yen, EURUSD Monetary Policy Balances

Talking Points:

• Risk aversion kicked in to start the week with a notable drop in global equities and Emerging Markets

• The sentiment shift is not yet strong enough to carry all the volatility gauges higher or flip Yen crosses

• Policy official speaking engagements and data will keep pairs like EURUSD attuned to the key trend driver

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The newswires may be cooling off from last week's nearly-ceaseless bombardment, but that doesn't seem to be allowing traders any peace. Risk trends took the lead as a fundamental driver with broad corrections in global equities. A series of disappointing economic updates - US national activity, Eurozone consumer confidence, China economic health - reminds market participants the conditions they are facing. And yet, this slip in sentiment is still far from hitting the breadth and intensity necessary for undiscerning selling of all positions considered 'risky'. Meanwhile, monetary policy keeps control of broader FX trends. The US, Eurozone and UK policy outlooks absorbed updates through Monday's session and look to further fodder to redefine their competitive position in the session ahead. We weigh and combine fundamental and technical conditions in today's Trading Video.

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