Headlines:

Markets:

  • USD leads, CHF lags on the day
  • European equities lower; S&P 500 futures down 0.6%
  • US 10-year yields up 10 bps to 4.10%
  • Gold down 1.1% to $1,633.39
  • WTI crude up 1.5% to $84.04
  • Bitcoin down 1.0% to $19,157

It was a quiet session in terms of headlines but after the relief rally to start the week, the sense of apprehension is finally being realised as we see the dollar come back into favour while equities and bonds slip. There wasn't much in it to cause the turnaround as Treasury yields pulled higher, leading to a decline in stocks and the dollar benefited as a result.

UK inflation came in at double-digits again, matching the 40-year high in July, and that also weighed slightly on the pound. GBP/USD fell from 1.1320 to 1.1225 during the session coupled with dollar strength.

Meanwhile, USD/JPY is nudging closer towards the pivotal 150.00 mark and intervention territory with another 0.3% advance on the day to 149.70 - its highest levels since 1990.

As the dollar gained, everything else fell with equities also seeing early gains evaporate and are now trading in the red. That is pushing commodity currencies lower on the day as well.

EUR/USD is down 0.8% to 0.9770 while USD/CAD is up 0.4% to briefly test 1.3800 during the session. AUD/USD is marked down by 0.5% to 0.6280 and NZD/USD is down 0.4% to 0.5660 on the day currently.

It's all shaping up to be a turn back to the old playbook, one that has been persisting for many months now as we gear towards key central bank meetings in the next two weeks.