Headlines:
- Dollar recovers some poise after Friday drop
- Fed's Williams does not rule out possibility of rates cuts next year
- Eurozone August Sentix investor confidence -18.9 vs -24.3 expected
- Germany June industrial production -1.5% vs -0.5% m/m expected
- UK July Halifax house prices -0.3% vs -0.1% m/m prior
- Switzerland July seasonally adjusted unemployment rate 2.1% vs 2.0% expected
Markets:
- NZD leads, CHF lags on the day
- European equities lower; S&P 500 futures up 0.3%
- US 10-year yields up 3.7 bps to 4.098%
- Gold down 0.3% to $1,935.74
- WTI crude down 0.9% to $82.04
- Bitcoin up 0.4% to $29,035
It was a quiet session as markets are observing a slower but calmer start to the new week.
All eyes are on the US CPI report on Thursday and it really can't come soon enough. The dollar is recovering some ground after the Friday drop as markets don't really have much else to reprice in terms of the Fed outlook as seen here. It's on to the next big data and we will have to wait for the inflation numbers later this week before any further convictions appear.
European stocks were marked lower and kept that way in a bit of a catch up to the losses at the end of last week in Wall Street. But US futures are in a calmer mood, so there is some mixed sentiment in there today.
For major currencies though, the rebound in bond yields is the one that is helping to prop up the dollar. USD/JPY is continuing to keep above 142.00 on the day, seen around 142.20-30 levels mostly in Europe. EUR/USD is also down slightly by 0.3% to 1.0980 with the low earlier touching 1.0965.
The commodity currencies are mostly little changed against the dollar but AUD/USD remains in a precarious spot with sellers still searching for a move towards 0.6500 next.
