The market moves are intense at the moment, as China delivers sweeping counter-tariffs against the US here. It’s a bit of a case of blink and you’ll miss it, with the price movements coming in thick and fast. In FX, we’re already seeing USD/JPY tumble below 145.00 now to fresh lows – down by 1% on the day.

Elsewhere, S&P 500 futures are down 3% and in Europe we’re seeing the DAX down by nearly 5% and CAC 40 down by 4%. As crazy as it sounds, we’re getting so close to talking about the DAX erasing all of its gains for the year when at some point last month it was up by close to 18% year-to-date. Baffling.

Going back to FX, the aussie is being crushed hard with traders now fully expecting the RBA to deliver rate cuts next month and all the way through to August at least. In the next three meetings, traders are pricing in ~86 bps worth of rate cuts currently. That is seeing AUD/USD tumble by over 3% now to 0.6117 on the day. The Pacific peso is back.

In other markets, gold is one of the biggest beneficiaries here as the precious metal has surged up from around $3,090 to $3,133. It is up 0.6% now after having been down by around 1% at the lows earlier in the session.

Meanwhile, 10-year Treasury yields are also hammered down to 3.878% currently – down 16 bps on the day. For some context, yields touched a high of 4.40% just last Thursday. So, we’re seeing it down by over ~53 bps from the highs in just a little over a week.

The best part? We’re not quite done yet.

I can’t image what a poor set of numbers from the US jobs report would do to the market mood. Traders and investors are already so focused on recession risks, so that will just really send things over the edge.

I believe we’re close to the point where margin calls will start to hit and we move on to the hold cash, sell everything mode in markets. In turn, that should help the dollar out a bit more when it happens; if not already.

This article was written by Justin Low at www.forexlive.com.