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Algos Freak Out After Rogue Tweet Of New North Korea Nuke Test Whipsaws USDJPY

Courtesy of ZeroHedge. View original post here.

Demonstrating vividly just how fragile and on edge the market is right now to any potential news of North Korean escalation - and just how much dominance headline-scanning algos have over asset prices – just after 5:34am ET, the USD/JPY plunged 0.3% to 108.45 while the rates market recoiled in a sharp risk off kneejerk reaction…

… after a widely retweeted Twitter report from the British Geological Survey announced that a M6.3 quake had been recorded in North Korea, hinting at yet another nuclear test.

Prelim data: World Earthquake alert: M 6.3: NORTH KOREA https://t.co/zlSb7JCC9z

— BGS (@BritGeoSurvey) September 6, 2017

Confirming just how algo-driven the market has become, however, just one click on the tweeted hyperlink revealed that this was just a delayed news announcement for North Korea's Sunday earthquake, something which the headline scanning algos refused to do and sold off everything first instead, not bothering to ask questions for minutes.

Of course, once human traders actually dug just one layer beyond the panic-inducing tweet, the USDJPY promptly rebounded to 108.71 on realization that the rogue tweet was merely a delayed reference to what everyone already knew, but not before taking out all stops at 108.50, leading to a surge in volume.

Still, while this time the information was wrong, this should be a good indicator of what will happen to asset prices during the next North Korean test, which at this point is virtually assured and most likely just days away.


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