Headlines:
- ECB's Knot: 25 bps rate hike in July is realistic
- Risk appetite improves further in European morning trade
- Dollar retreats on risk optimism
- Eurozone Q1 GDP second estimate +0.3% vs +0.2% q/q prelim
- UK April claimant count change -56.9k vs -42.5k expected
- OPEC+ continues to produce well below required level in April
- Japan takes first steps in reopening borders for tourism
- Russia says talks with Ukraine are not taking place 'in any form'
Markets:
- GBP leads, JPY lags on the day
- European equities higher; S&P 500 futures up 1.7%
- US 10-year yields up 3.4 bps to 2.913%
- Gold up 0.3% to $1,829.47
- WTI crude up 0.7% to $114.99
- Bitcoin up 1.6% to $30,421
The market is embracing a more positive risk mood and that is pretty much setting the tone for trading on the day.
Equities are surging higher while bond yields also ticked up, with the dollar seen retreating against its peers. The moves are pretty decent with the likes of the euro, aussie and kiwi gaining nearly 1% against the greenback. Meanwhile, the pound is indeed up over 1% against the dollar as cable comes up for some air.
EUR/USD moved up from 1.0420 to 1.0480 before catching an added bid following ECB policymaker Knot's remarks on a potential 50 bps rate hike in July. That sees the pair now near 1% gains at around 1.0530.
GBP/USD pushed higher from 1.2380 to 1.2490 and is holding up 1.3% on the day around 1.2475 now ahead of some resistance around 1.2500. The pound is also helped by more solid UK labour market data earlier as well.
Meanwhile, the aussie and kiwi are benefiting from the more optimistic risk mood with US futures extending gains during the session. S&P 500 futures were initially up around 0.3% before rising up to gain by 1.7% now.
AUD/USD pulled up from 0.6990 to 0.7040 as buyers look to try and test a hold above 0.7000 for now.
US retail sales data and Fed chair Powell's speech on inflation will be the next two key risk events coming up later.
