Headlines:
- Dollar firms amid more defensive risk mood
- Equities stay cautious as bond yields slide back down as well
- Eurozone consumers anticipate lower inflation but weaker spending power - ECB survey
- Germany July final CPI +6.2% vs +6.2% y/y prelim
- France June trade balance -€6.71 billion vs -€8.00 billion expected
- US July NFIB small business optimism index 91.9 vs 91.0 prior
Markets:
- USD leads, AUD lags on the day
- European equities lower; S&P 500 futures down 0.8%
- US 10-year yields down 8 bps to 3.998%
- Gold down 0.4% to $1,929.44
- WTI crude down 1.8% to $80.42
- Bitcoin up 0.5% to $29,292
It was a quiet session bereft of headlines but there were some decent market moves. It would seem European traders are responding to the poor China trade balance from earlier today, as recession fears start to resurface.
That saw more defensive risk flows as equities slumped lower while bond yields also dropped. The latter in particular is rather notable with 10-year Treasury yields sliding back under the 4% mark.
In turn, the dollar kept up its bid from Asia trading and extended gains during the session. EUR/USD fell from 1.0980 to 1.0940 while GBP/USD dropped from 1.2760 to 1.2700 with both pairs more than erasing the advance from yesterday.
USD/JPY is keeping firmer around 143.05 but is down from around 143.40 earlier in the day.
As risk sentiment stays more defensive, the commodity currencies are the ones being hurt the most. USD/CAD is up 0.8% to 1.3475 as oil prices also drop heavily on the day. Meanwhile, AUD/USD is down 1.1% to test the 0.6500 mark.
It's now over to Wall Street to make do with the more dour risk mood at the moment.
