Daily thread to exchange ideas and to share your thoughts
Equities are unperturbed as we see another record high in Wall Street yesterday but there are some quarters voicing caution ahead of earnings season.
The threat of virus mutations and supply disruptions (leading to higher inflation) is also something to be mindful about, so it isn't all sunshine and butterflies.
Commodity currencies did well to bounce back after a relatively soft start in Europe yesterday, with AUD/USD knocking on the door of 0.7500 now as buyers push back above both key hourly moving averages.
Meanwhile, NZD/USD is testing 0.7000 again as buyers look to try and establish more near-term control themselves in the pair as well.
USD/JPY is inching a little higher to 110.40 as Treasury yields hold steadier but the US CPI data release later today will pose some short-term risks on the week at least.
Another case of sell the rumour, buy the fact for the bond market? Hmm.
There are still some imponderables with regards to the current outlook but I would argue that the latest developments in the past two weeks do not take away from the fact that major central banks are still looking to normalise policy in the months ahead.
Of course, the BOC, RBNZ, Fed and to some extent the BOE are leading the charge.
The former two will be in key focus this week so we'll see if they will stick with the more hawkish undertones, which should arguably provide a tailwind for their respective currencies to push higher in the bigger picture of things.
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