The anti-risk Japanese yen (USD/JPY) moved lower this morning, hitting a two week low. The sentiment sensitive AUD/USD Forex market traded lower along with Asian shares. US stock market futures are moving broadly lower as sentiment is rapidly souring after reports that former (fired) FBI Director James Comey wrote a memo of a meeting where President Donald Trump asked him to drop the probe into former national security advisor Michel Flynn.
This news comes after the Washington Post reported that President Trump shared classified intelligence with senior Russian diplomats who were visiting the White House last week. Traders are now increasingly growing worried that the ever mounting scandals that are engulfing the administration may derail plans for tax reforms and their expansionary fiscal policy. Both are expected to boost corporate earnings and push the Fed into a steeper rate hike cycle. This is taking the wind out of the Trump Effect.
US Futures fall as the Japanese Yen Gains
As the Japanese yen moved higher, futures tracking the major US and European equity markets are sinking deep into negative territory. This suggest that traders are going squarely risk-off and this mood will carry through most of the day. Traders should note that the global financial markets are vulnerable to stray headline risk at the present time. There could still be a lot of volatility on both sides of the coin today.
Today’s economic calendar, starting in Europe is full. The Unite Kingdom will release its jobless claims data. However the outcome seems unlikely to inspire much of a response from the British Pound as the Bank of England monetary policy is firmly neutral right now.