ASIA-PAC MID-SESSION UPDATE: Mueller Probe Roils the USD…. Eventually

A WSJ piece suggesting that US Special Counsel Mueller has issued a Subpoena for Russia-related documents from Trump campaign officials triggered an initial, mild USD dip against the JPY, with the pair crossing below 113 the figure. It took the other major currencies a while to cotton on, but the dollar did eventually sell off across the board, with the GBP and EUR leading the AUD and NZD, as the USDJPY moved towards 112.50. Elsewhere, the KRW continued to appreciate despite further verbal intervention from the Korean authorities.

China’s central bank injected the most cash (on a weekly basis) into the system since January,  with many pointing to the shoring up of the bond market as the reason behind the injection, with 10-year yields hovering around 4%.

The Nikkei 225 also took its time to catch up to the Mueller story, although reports pointing to North Korea conducting 'aggressive' work on the construction of a ballistic missile submarine probably helped the selloff. The Japanese blue-chip index rose as much as 1.8% in early dealing, but the broad based dollar retreat led to the index unwinding the bulk of its gains; the index finished the morning session up 0.2%, as tech stocks outperformed.

Australia’s ASX 200 has added 0.2% so far with IT, industrials and healthcare leading the way, as utilities lagged.  Mainland

Chinese stocks fell, with the Shanghai Comp down circa 0.7% as the PBoC’s injection has done little to underscore risk appetite, while the Hang Seng rallied 0.7%.

WTI Crude was more resilient to the risk aversion than its Brent counterpart, while gold topped USD 1,280/oz. Treasuries and JGBs also garnered support, as risk off flow outweighed the BoJ trimming the size of its shorter end Rinban operations.

17 Nov 2017 - 02:30- Forex- Source: RANsquawk

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