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Brazilian financial assets tumble, Chinese currency softness back on the menu, Trump decries investigation into his campaign’s ties with Russia. Here are some of the things people in markets are talking about.

Bloodbath in Brazil

Things got real bad for Brazilian financial assets after reports of leaked testimony indicating that President Michel Temer approved payoffs as part of a cover-up scheme. The nation’s currency, bonds, and stocks plummeted, with trading on the Ibovespa briefly halted as circuit breakers were triggered during the index’s worst session since 2008. In a televised address, Temer denied the allegations and insisted he won’t resign, saying a full investigation will prove his innocence.

‘Game On’

We might be looking at “‘game on’ again for Chinese currency weakness,” warns Bloomberg Intelligence macro strategist Cameron Crise. Relative to the reference basket highlighted by People’s Bank of China, the yuan continues to set new lows. U.S. Treasury Secretary Steven Mnuchin told a Congressional committee on Thursday that China’s strategy of selling foreign reserves to support the yuan is “actually good for American workers.”

‘Witch Hunt’

U.S. President Donald Trump denied that he asked former FBI Director James Comey to drop an investigation of fired National Security Adviser Michael Flynn during a news conference at the White House. Earlier in the day, Trump tweeted that the probe into any links between members of his campaign team and the Russian government constituted “the single greatest witch hunt of a politician in American history.” The appointment of former FBI Director Robert Mueller as special counsel overseeing the investigation has been praised by lawmakers on both sides of the aisle. The financial elite currently gathered for the SALT conference in Las Vegas, however, don’t appear too concerned about what happens to the Republican agenda of tax cuts and deregulation if Trump is impeached.

Buck Bounces

Bloomberg’s U.S. dollar index broke its six-session losing streak Thursday as the Federal Reserve is seen as continuing on its tightening course despite the turmoil emanating from Washington. The greenback was the best performing G10 currency on the day, and U.S. stocks pared some of Wednesday’s losses, which were the worst of 2017. The S&P 500 Index rose 0.4 percent amid a positive string of domestic economic data. Ten-year Treasury yields edged higher while West Texas Intermediate front-month futures advanced by 0.5 percent.

Futures Mixed

The Japanese yen retraced some of yesterday’s gains as investors showed a greater appetite for risk, and Nikkei 225 futures are correspondingly pointing to a higher open for the last session of the week as of 5:30 a.m. Tokyo time. S&P/ASX 200 futures are marginally in the red. Stocks in the region suffered their biggest loss in six weeks on Thursday amid a notable uptick in volatility.

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