We saw a continuation of steady trading conditions yesterday and the dollar once again benefited as moved back to better levels against all of the other major currencies. The Dxy is moving back towards 90.00 and is currently trading around 89.70 as we move into the Asian session proper. The equity markets had another mixed night with the European bourses all looking healthy before the US indices finished their day on the back foot. The market continues to closely monitor the US bond yields this week with the US government due to complete record auction numbers in the next few days, the US 10Yr continues its upwards move towards 3% (currently at 2.903%), with the 2 year rate jumping to it’s highest level since 2008.
Looking ahead to today’s trading and we do have an increase in risk events as we move through the day, first up in Australia we have the wage price index data due out at 11.30 this morning, this will bring the Aud into focus after last quarters release gave us a downside surprise – the Aud bulls will be looking for a stronger number to lift not only the currency but also the RBA. Into the London session and the focus for the market will come sharply onto the UK and sterling as we have the UK employment data due early in the session and then the BOE Inflation Report Hearings later in the day. There is very little of consequence out early in the New York session however we have the latest FOMC meeting minutes due towards the end of the session which will be a focus for traders alongside the bond auctions.