The forex markets are rather quiet in Asian session today, but risk aversion is dominating in stocks as lead by deep decline in Hong Kong. Institutional investors could be starting to light up their positions just ahead of an important December. US support of Hong Kong autonomy and democracy movement triggered furious reactions from China. Yet, it’s uncertain what China’s retaliations to the Hong Kong Human Rights and Democracy Act are. Also, it’s equally uncertain how trade negotiations are affected. One interpretation on US President Donald Trump’s “speedy” signing of the act is that, phase one trade deal is probably not that close and there’s nothing to wait for.

Staying in the currency markets, Yen is so far the weakest one for the week, following record runs in US stocks and recovery in treasury yields. It should be noted that 10-year JGB yield is currently at around -0.078, back above -0.1 handle. Australian Dollar is the second weakest, followed by Swiss Franc. On the other hand, Sterling is the strongest on optimism that a Conservative win in the upcoming election would finally clear up all Brexit uncertainty. Kiwi is the second strongest, followed by Canadian.