The response to proposed fresh U.S. tariffs on Chinese imports worth $200 billion nL1N1U623R has been broad risk-off in Asia, sending stocks, commodities, US Treasury yields and JPY crosses all lower, led by AUD/JPY.
President Trump has raised the bar in the trade conflict and the market now awaits China's response.
Is this the hair that breaks the camel's back, taking global stocks and risk lower, or is it an over-reaction in relatively illiquid Asian markets? Only time will tell.
The highlights so far are: 10-year UST yields down 3bp to 2.834%, E-mini S&P -0.9%, the Nikkei 225 -1.7%, MSCI Asia-ex-Japan -1.3%, SSEC -1.8%, London copper -2.8%, WTI crude futures -1% and USD/CNH +0.4%.
AUD/JPY, always a barometer for risk in FX, is off 0.6%.
Having found support at the 82.05 Tenkan line this morning, the cross would target 81.87 on a break below - that level marks 50% of the June-July fall, followed by 81.56, the 61.8% retracement.
The 82.62 and 82.75 daily cloud parameters are initial resistance.
Bigger picture for the cross, there's major support at the 80.60/65 double bottom in June while yesterday's failure at 83.02, 61.8% of the June fall, becomes major resistance.
auj2 jul 11 Click here