Headlines:
- Equities pull higher but the big test comes tomorrow
- UK PM Johnson says to end COVID-19 self-isolation requirement one month early
- US MBA mortgage applications w.e. 4 February -8.1% vs +12.0% prior
- Germany December trade balance €6.8 billion vs €10.9 billion prior
- ECB's Nagel: If inflation picture doesn't change by March, I will advocate to normalise monetary policy
- BOJ's Nakamura: Must patiently maintain current easing policy until wages rise substantially
Markets:
- NZD leads, USD lags on the day
- European equities higher; S&P 500 futures up 0.9%
- US 10-year yields down 3.1 bps to 1.925%
- Gold up 0.1% to $1,827.08
- WTI down 0.5% to $88.93
- Bitcoin down 0.9% to $43,850
It was a quiet session in terms of headlines but there were some decent market moves to take note of.
Equities are keeping the bounce from yesterday and extending gains, as bond yields are looking a fair bit calmer on the day. Some pushback by ECB policymakers this week may be helping with that, particularly Villeroy's comments here.
European indices are posting well over 1% gains while US futures also pushed higher on the session with S&P 500 futures now up 0.9%.
Amid the more positive risk backdrop, the dollar was sluggish and fell across the board. EUR/USD moved up from 1.1410 to 1.1444 while GBP/USD climbed from 1.3540 to 1.3589 on the session.
The aussie and kiwi are the lead gainers with AUD/USD moving up from 0.7155 to 0.7184 and NZD/USD also nudging higher from 0.6645 to 0.6693, both touching fresh two-week highs.
Elsewhere, oil continues to struggle as WTI is down and retesting the lows from yesterday just below $89.
Despite the more risk positive moves today, it may all be for naught as the big focus this week resides on the US consumer inflation report tomorrow. That will be the big test for risk trades before the weekend.
