The softer US PMI data from yesterday is still reverberating but also a much improved risk mood. Geopolitical fears have subsided since the weekend and that is helping to see stocks bounce back quite nicely to start the week. In turn, risk currencies are picking up on that with the aussie also helped by hotter inflation numbers earlier.
As seen here, AUD/USD has moved up to test a key technical level on the day. The pair is still up 0.5% to 0.6515 as it keeps near the highs.
So, what's next for markets in general?
As we look to put behind us the whole Israel-Iran episode, the focus shifts back to US data. Equities will look to that to keep the momentum from this week, with S&P 500 futures up another 0.35% currently. But we might have to wait until tomorrow at least, with the US advanced Q1 GDP figures on the cards. Then on Friday, there is the US PCE price index to get through. As a reminder, that is the Fed's preferred measure of inflation so it is one to watch.
For today, it's all about digesting the PMI data from yesterday and sticking with the overall risk mood. The dollar is ceding some ground but we'll see if that turns into anything bigger after the gains earlier this month. If anything else, do keep an eye on USD/JPY as well as the pair remains very much underpinned at 154.85 currently.
In terms of data releases in Europe, the German Ifo business survey for April is the main one to watch. But in all likelihood, the releases today won't do much to shake things up.
0800 GMT - Germany April Ifo business climate index
0800 GMT - Switzerland April UBS investor sentiment
1000 GMT - UK April CBI trends total orders
1100 GMT - US MBA mortgage applications w.e. 19 April
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
