More JPY weakness despite risk off start to session
Other markets
The wall of worry spoken about in yesterday’s wrap returned overnight. The sheer list of concerns is telling in itself: Evergrande default anxiety, supply chain complexities and delays, inflation fears with even Japan bucking its deflationary trend, and energy prices precariously high all have traders angsty. 

Gut vs analytical 
There are basically two types of thinking that we do: 
The automatic is your gut feel. The longer you have traded the more you should trust your gut feel. The analytical part of your mind is that part of you that slows down to think. The part of you that needs to sit down

Dollar smile theory
It is helpful. 
Do you ever get confused when you are trading the USD? It is understandable. The USD has different drivers at different times.
 

Be plain 
One of the often overlooked aspects of trading is that not every single instrument is equal. Some are more expensive than others, some are more volatile than others. 

Temporary shutdown in communications.

Iron Ore
Iron Ore prices  (light orange)have moved sharply higher helping lift the AUD today as well as positive COVID news. 
If Iron Ore prices keep rising higher then expect that to further support the AUD. Around 20% of all Australia’s exports are Iron Ore. Coal is the next highest export and those prices are already well

Risk leans on, but risk remains
Other markets
– FTSE +0.32% 
– Dax -0.47%
– CAC -0.34%
– Bitcoin +2.77%
– Gold -0.14%
– US oil +2.95%
 Oil markets kept pushing higher on the three main drivers of low inventories, rising demand, and skilled OPEC market communication. 

EU proposals
Risk for the GBP this week is if PM Johnson plays hard ball with EU and no compromise decisions are reached over the N.Ireland protocol.   

Commodities are natural resources 
The AUD, NZD & CAD are collectively known as the commodity currencies. Why? Because they are heavily influenced by their export of various commodities. 

Constant risk
Keep in mind that the Evergrande crisis could spark risk off trading at any moment. Be aware of short the JPY…