Yellen and Fischer seem to have turned the market
Outside days in the EUR, US 10y, and Commodities have been made today, indicating bearish price action in EMFX should follow.
Market initially rallied following the release of Yellen’s speech at Jackson Hole. She was, at most, mildly hawkish, keeping the possibility of a hike this year open and reaffirming the labour market and inflation are heading towards the Fed’s target. I guess the market saw it as the same old Yellen.
Later on, Vice Chairman Stanley Fischer, came out and ‘clarified’ what Yellen had said, which amounted to seeing up to two hikes this year. This caused the market to sell off, forming today’s Outside Days. Additionally, they have appeared in several EMFX currencies (MXN, TRY, BRL, etc).