The risk rally has somewhat faded after China decided to let Yuan lose some value in the fixing, it seems that was totally unexpected after the recent comments. As a result Asian equity markets gave up some gains and FX lost momentum. USDJPY took a dive after heavy selling for the last two weeks, it was not able to break higher from 113,50s. AUDUSD pushed 0,7250s but failed to break, commodities are well bid given the recent price action and as of the morning price action has not been broken down yet. Emerging Markets are relatively stronger but not rallying, EURUSD has lost momentum to go lower with stocks. The risk rally was mainly driven by EUR cross weakness, commodity strength, lower rates and broadly stronger equities.Given the poor liquidity so far this year, the recent risk rally could break down but for the time being it seems to be holding on.
