Overnight, markets took a turn for the worse. US Treasury yields are close to testing their recent lows, while Asian equities and S&P 500 futures turned red. EM currencies are on the backfoot following the rout in all things Argentinian, plus the downward pressure on the Chinese currency. Still, not all is lost as USDJPY is actually higher for the session, at 105.4 up almost half a cent from yesterday’s lows. Still, that’s close to a 7-month low.
It’s hard to point out a clear catalyst, except for the bond market’s self-fulfilling gloom, which we have discussed repeatedly. Furthermore, there’s nothing positive happening in the US-China conflict. And things aren’t getting any better in Hong Kong either while global data continues to point down (more on that further down below).

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