Themes

· General mood is “risk off”

· Biden announces largest ever release of oil from the U.S. SPR

· All eyes on Japanese Tankan today

What’s Moving

News of the overnight session was U.S. President Biden announcing that the U.S. will release one million barrels of crude oil a day for the next six months from the U.S. Strategic Petroleum Reserve. This is the largest release from the SPR in history and saw the price of oil hit hard over the session.

There was some selling of Euro into the London Fix and over the day, the Euro was the worst performing currency. Commodity currencies held up reasonably well considering the SPR announcement.

Thoughts

With little in the way of major movements overnight, expect position adjustment to be the dominant flow in Asia today, although the Japanese Tankan report may have something to say about that. Asian session data today includes:

· Japanese Tankan Manufacturing Index (E: 12)

· Japanese Tankan Non-Manufacturing Index (E: 5)

· Chinese Caixin Manufacturing PMI (E: 50.0)