Headlines:

Markets:

  • JPY leads, NZD lags on the day
  • European equities lightly higher; S&P 500 futures down 0.7%
  • US 10-year yields up 3.1 bps to 3.476%
  • Gold down 0.1% to $1,894.48
  • WTI crude up 0.5% to $78.81
  • Bitcoin up 0.3% to $18,884

It was a quiet session initially with very little follow through to yesterday's US CPI reaction. The only notable mover was arguably the Japanese yen, as it continued to rise with USD/JPY falling to fresh lows since 1 June of 128.10 to start European trading.

But as we got towards midday in Europe, markets caught a whiff of a scent of risk aversion in the air and that was enough to get things flowing. US futures dipped around the same time as big banks reported earnings, though perhaps the technicals better explain the lack of conviction by bulls to push further after yesterday.

S&P 500 futures were little changed mostly before falling by 0.7% and that is taking the dollar higher as we look towards US trading.

EUR/USD was initially up to around 1.0860 but has fallen to near 1.0800 now as the dollar returned into favour. USD/JPY also sees a bounce from 128.10 to 128.70-80 levels now, though sellers are still well in control after the break below 130.00 yesterday.

Meanwhile, GBP/USD was a touch higher after a surprisingly upbeat UK November GDP figure, moving to 1.2240 before falling back to 1.2170 currently.

The antipodeans are the biggest strugglers amid the more defensive risk mood with AUD/USD down 0.5% to 0.6940 after having come close to test 0.7000, and NZD/USD down 0.6% to 0.6355 at the moment.

In the commodities space, gold threatened a further upside break above $1,900 but as the dollar firmed, we are seeing sellers hold the line for now.