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May 18th, 2018: Yen Surges on US Yields

Morning Report: 07.00 London

There are numerous threads pulling at markets at the moment, including stress on emerging markets and Argentina, oil prices at 3 ½ year highs and soaring US Treasury yields. The clearest reaction has been seen on the USD/JPY as the yen soars on safe-haven interest. The USD/JPY is approaching 111.00 after breaking just three days ago.

Other yen pairs are on the rise, with the GBP/JPY knocking on the doors of 150.00.

The US dollar index remains at the highs, though has a negative bias this morning.

Dollar pairs are generally on the front foot this morning, with small gains for the EUR/USD and AUD/USD. The GBP/USD is struggling, however.

Gold continues to struggle after Tuesday’s collapse, while silver is holding up relatively well.

Coming up today

FOMC Mester speaks at 08.00.

Canadian inflation is at 13.30

Trade Idea

The dollar may be under some pressure this morning, but the pound has many question marks hanging over it, not least its menopausal economy.

May 18th, 2018: Yen Surges on US Yields

With pressure surrounding sterling, a good way to play this is a LOWER trade predicting that the GBP/USD will close below 1.3500 in 14 days for a potential return of 103%.

May 18th, 2018: Yen Surges on US Yields