Despite the large sell-off in the Shanghai Composite overnight, opening down more than -8.0%, and one of the worst openings in nearly 13 years, the market is returning to a calmer mood.
This calm mood has been helped by the People’s Bank of China injecting cash into Chinese markets in order to support the financial system. So, as we approach the European session’s cash open we are expecting some support for European equity markets. US futures are up +0.65% at the moment.
The best approach to take now is to wait and monitor the risk tone. Keep an eye on the latest coronavirus updates to measure risk.
- Risk-on flows= AUD, NZD, CAD buying and JPY, CHF selling
- Risk-off flows= JPY, CHF buying and AUD, NZD, CAD selling