Yen gaining on risk aversion

  Yen gaining on risk aversion

–    Most stock markets around the world declined Friday and Monday in Asia

–    Fed commentators add to fears of global growth

–    USD/JPY usually moves in line with Tokyo stocks and global equities, so it’s normal that JPY would gain under these circumstances

•     Investors might want to play this through short commodity currencies (AUD, CAD), long JPY

•     China trade surplus falls more than expected

–    Exports rise more than expected, while imports soar

–    Good news for everyone as it supports both domestic and international growth

–    AUD/USD still below Friday’s levels though, perhaps showing impact of lower stocks

•     Today:

–    No major indicators from Eurozone, UK or US

–    US: Columbus Day holiday; markets open

–    Speakers: ECB’s Praet and Weidmann speak; Fed’s Evans. Weidmann talk on “Conditions for a Stable Currency Union” will be interesting to see the contrast between his vision and Draghi’s