I am yet again not surprised that the market  reacted so slowly to the bad numbers such as last Friday’s  NFP  when the positioning is not in the same direction.  Big players  were  keen to save time to hand over the hot potatoes to the other risk bulls and used good China numbers over the weekend as a good reason.

Below is the story of the overnight price action.

AUDUSD dropped from 0.9305 to 0.9171 and  GBPAUD rallied from 1.7293 to 1.7615.

EURJPY got smashed from 133.82 to 131.63 and USDCAD bounced from 1.0314 to 1.0414.

Basically XAU dropped 26$ and Crude chased the tail for 2.5$ led AUD, CAD suffering while risk off theme led EURJPY getting hit as well.

I think for the rest of the day, as long as any good news dominates the session with better recovery stories, every squeeze of risk shorts must be a good chance to sell on rallies.

*Stocks, Oil Drop as Bonds Rally on Concern Recovery to Slow

Jan. 12 (Bloomberg) — The Standard & Poor’s 500 Index dropped for the first time this year while European stocks fell the most in three weeks and Treasuries rose on concern the economic recovery will slow as governments withdraw stimulus.The S&P 500 tumbled 0.9 percent to 1,136.22 at 4 p.m. in New York. Europe’s Dow Jones Stoxx 600 Index declined 0.9 percent. The 10-year Treasury note yield declined 0.10 percentage point to 3.72 percent, while the yield on the German bund slipped to the lowest level this year. The yen strengthened against all 16 major counterparts, while crude oil slumped the most in five weeks. Grains plunged in Chicago after the government said farmers harvested record corn and soybean crops. China ordered banks to set aside more reserves to cool the expansion of the world’s fastest-growing major economy, stoking concern that recovery from the global recession will falter.
“On top of that, there’s also China weighing on the market. As the global economy shows signs of strength, central banks will have to start tightening at some point.”