The drop in Nasdaq futures is warranting some attention as it presses the pause button on the equities rebound this week. Dip buyers will see a test to their resolve today before all eyes turn towards the US non-farm payrolls tomorrow.
The close in the S&P 500 yesterday took it above its 100-day moving average, so we'll see if that holds later in the day. That is the risk for any further upside extension on the week.
Meanwhile, the dollar is holding steadier so far today but is rather sluggish overall this week. I don't think there will be much to shake things up before tomorrow's jobs data.
Two big focus areas today will be the ECB and BOE policy meetings. I reckon those hoping for a hawkish tilt from the former will be met with disappointment as Lagarde will likely reaffirm the status quo despite record surging inflation.
As for the BOE, a 25 bps rate hike is all but baked in at this point but the question is what comes next? Will policymakers reaffirm a more hawkish message or dial back on being too aggressive in tightening instead?
I'm leaning towards the latter though any considerable dip in the pound against the euro and yen are perhaps trades worth exploring in terms of a structural point of view.
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