Headlines:
Markets:
- GBP leads, JPY lags on the day
- European equities higher; S&P 500 futures up 0.4%
- US 10-year yields up 2.7 bps to 3.943%
- Gold down 0.5% to $1,808.58
- WTI crude up 1.5% to $76.81
- Bitcoin up 0.3% to $23,456
It was a mixed session overall as European traders were treated stronger inflation data from France and Spain. That came right at the start of the day and triggered a move higher in regional bond yields as well as Treasury yields. Equities were weighed down as such, with money markets pricing in a 4% terminal rate for the ECB for the first time in this tightening cycle.
In FX, the dollar also advanced across the board but that quickly switched as stocks found a bottom. The incredible resilience in European equities continues to play out, with US futures also recovering. S&P 500 futures were down as much as 12 points but are now up 14 points instead on the day.
That also set the tone for a reversal in the major currencies space, with dollar gains evaporating. GBP/USD saw a notable turn from a low of 1.2027 to 1.2100 currently. Meanwhile, EUR/USD has been largely sticky around 1.0600-10 levels as seen now.
The antipodeans were pressured early on but have recovered some poise to keep little changed against the dollar now. AUD/USD is flattish around 0.6730 but off its earlier low of 0.6705. NZD/USD is trading down 0.1% at 0.6160 but it was as low as 0.6135 earlier in the session.
The only exception has been USD/JPY, which is at 136.60-70 levels after the early bump higher. That comes as bond yields are still holding slightly higher on the day.
February month-end flows will be a consideration in the session ahead, with eyes on the London fix perhaps. We’ll see how that plays out amid the choppy week we are seeing so far.