The risk rally has been stalled for a second day in Asia, Emerging Markets have lost some ground but there is no selling momentum. It looks more like a USD strength squeeze rather than outright USD buying at the moment. USDJPY is lower with Kuroda comments but is still directionless. AUD has seen take profits from 0,7580s to 0,7480s in the last two days, USDCAD is higher with lower oil but has not really broken the top side. Overall it looks like FOMC is pushing people to take some risk off the table and and squeezing positions but has not broken any levels so far. Given how light long term positioning really has been, this move is unlikely to become a massive sell off for the moment but one has to acknowledge developed market interest rates have shifted higher in the last week. A correction in risky assets should go on until FOMC. I do see a chance of FED hiking but even in the case of a hike, the reaction should be limited to less than two days.
