Headlines:
- ICYMI: ECB policymakers see growing probability of rates moving to "restrictive territory"
- Euro looks to come up for air
- UK July monthly GDP +0.2% vs +0.4% m/m expected
- France's Le Maire: Government can't bear all of the energy price increase
Markets:
- EUR leads, USD lags on the day
- European equities higher; S&P 500 futures up 0.5%
- US 10-year yields down 3.4 bps to 3.287%
- Gold up 0.8% to $1,729.13
- WTI crude up 0.6% to $87.32
- Bitcoin up 4.8% to $22,310
The euro and broader market sentiment is cheering the start of the new week as the single currency looks to come up for air amid a technical break above 1.0100 against the dollar. There was a decent gap higher at the open today and the euro has built on that during the session, touching a high of 1.0197.
One can point to more hawkish talk by ECB policymakers or just general positive developments from the Russia-Ukraine conflict as the latter is making some gains. But I'd rather just let the charts do the talking as the momentum carries over from last week.
USD/JPY also initially tracked higher to 143.49 but ran into near-term resistance before falling back now to 142.45, pitting the dollar as the weakest performer on the day now.
Meanwhile, GBP/USD also opened with a gap higher around 1.1640 before pushing higher towards 1.1700. The dollar was initially holding its own against the commodity currencies but as risk sentiment picked up, the greenback also fell against the group.
USD/CAD declined from 1.3020 to 1.2990 while AUD/USD ran up from 0.6840 to 0.6885 on the session.
The mood carries over from last week but we will have to see what the US CPI data tomorrow has to offer as that will set the tone for the rest of the week surely.
