Headlines:
- Dollar stays bid in European morning trade
- Dollar breakout against the Chinese yuan adds a tailwind to the rebound this week
- ECB's Nagel: The probability of a rate cut before the summer break is increasing
- ECB's Holzmann: A rate cut is in preparation
- BOE governor Bailey reaffirms that rate cuts this year is not unreasonable
- Japan's largest union group Rengō says average wage hike seen at 5.25% after second tally
- Germany March Ifo business climate index 87.8 vs 86.0 expected
- UK February retail sales 0.0% vs -0.3% m/m expected
- UK March CBI trends total orders -18 vs -20 prior
Markets:
- JPY leads, AUD lags on the day
- European equities mixed; S&P 500 futures down 0.2%
- US 10-year yields down 3.3 bps to 4.237%
- Gold down 0.7% to $2,166.01
- WTI crude flat at $80.66
- Bitcoin down 1.9% to $64,247
It's been a rather eventful week but less so today, as markets are settling down after the host of major central bank decisions in the last few days.
The dollar is staying bid following its rebound yesterday, moving higher across the board against all the rest of the major currencies except the yen. And that is starting to draw in a couple of key technical questions as outlined earlier here.
EUR/USD is down 0.4% to 1.0810 as it looks to break below both its 100 and 200-day moving averages, while GBP/USD is down 0.6% to 1.2580 as it looks to do the same as well today. USD/JPY traded rather sideways during the session, around 151.40-50 levels after a slight retreat in Asia from a high of 151.86 amid verbal intervention from Japanese officials.
Elsewhere, USD/CAD is back up by 0.4% to near the 1.3600 mark again while AUD/USD is the laggard - down 0.9% on the day to 0.6511 at the lows currently. The aussie is not helped by the fact that China has abandoned the 7.20 threshold in USD/CNY, allowing for the yuan to weaken further today. That in turn is an indirect tailwind for the dollar.
In the equities space, we're seeing a more cautious mood after the late retreat in Wall Street yesterday. US futures are down with European indices also struggling a little so far today. But in the bigger picture, this is very much still just a consolidation at the top for stocks.
The mood board is set up to see if the dollar can set out on a leg higher ahead of the weekend.