European FX Open - A global rout

USD/YEN opens over 300 points lower from Friday's closing prices after the widespread misses in Friday's US jobs report.

Supporting the move to 142.22 and softest levels since the very start of January, it is reported GOLDMAN SACHS economists raised their odds for a US recession in the next year to 25% from 15% after the weak jobs report though it noted the risk is limited and the Fed has room to act quickly if needed.

Meanwhile, BOJ board members discussed how the YEN’s weakness was an upside risk to prices, according to Minutes from June's meeting, a month before the Bank raised the key rate again.

The commodity bloc starts the week a little softer too amid a likely further paring of carry, as the US stock futures stand thick in the red at the time of writing, led by the -3.6% NASDAQ Futures amid rising US and global economic concerns.

We suspect much of the focus here will be on USD/YEN and a possible further slide towards 140.00 and beyond this week, while other traders and investors will also be looking at EUR/USD and a possible 1.1000-plus break amid some growing expectations that a Fed interest rate cut cycle could become more aggressive than that of the ECB.

This session, events wise, services and composite PMIs will be highlights in Europe and in the second half US data will be back under the microscope.

Key release is the ISM services index which surprised to the downside last month, dropping by 5 full points to 48.8. The market expects it to rebound to 51.0 in July, in line with its longer term, gradually, slowing trend (ABN AMRO).

Fed's Goolsbee is a scheduled speaker this session.

Elsewhere, oil stands below the psychological Usd 80/brl amid the wider selloff in financial markets beats out for now the rising tensions in the Middle East and geopolitical worries, with investors braced for a potential retaliatory strike on Israel by Iran.

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