Headlines:
- Dollar nudges higher as stocks, yields stay anchored
- Major central banks confirm to revert back to weekly dollar swaps with the Fed
- ECB's Lane: Further rate hikes beyond May will depend on the data
- ECB's Villeroy: Inflation will probably come down towards 2% at the end of 2024
- BOE's Broadbent: Had we seen inflation shocks coming, we would've tightened policy sooner
- Switzerland March trade balance CHF 4.53 billion vs CHF 3.31 billion prior
- UK April CBI trends total orders -20 vs -20 expected
Markets:
- JPY leads, AUD lags on the day
- European equities lower; S&P 500 futures down 0.5%
- US 10-year yields down 7 bps to 3.445%
- Gold down 0.5% to $1,978.43
- WTI crude down 0.8% to $78.13
- Bitcoin down 0.2% to $27,415
The dollar is getting a bit of love again after a rough start to the new week, as stocks and bond yields are looking heavier today. It's tough to balance out the narratives in broader markets at the moment but here's my take on things.
As the risk mood is leaning towards the softer side, the dollar is seen nudging higher in European trading with EUR/USD falling from 1.1050 to 1.1010 on the session. The pair is flanked by a large set of option expiries, so there is also that to consider before they roll off later in the day.
GBP/USD also extended its fall from Asia, when it hit a high of 1.2500, to 1.2430 as sellers start to wrestle back near-term control. The aussie is the laggard as risk trades are on the defensive, with AUD/USD down 0.7% to 0.6650 levels at the moment.
Equities were sluggish throughout, with European indices opening lower and consolidating losses so far on the day. Meanwhile, Treasury yields are also feeling heavy and have kept lower since Asia trading already.
With the dollar inching higher and risk staying subdued, gold is marked lower again to contest daily support at $1,981 - as it has been doing since last week. Then, we are also seeing oil slip back by nearly 1% towards $78 ahead of US trading.
