Overnight market performance signaled a moderate shift to ‘risk-off’ sentiment, led by a stronger dollar, lower treasury yields and lower equities. The dollar is higher against 8/10 of the G10 pairs, the primary gains vs. NOK, SEK, NZD, and CHF. The dollar index is -0.04% at 105.858, near the high end of its 4-month 104.00/106.50 range.
Treasury yields are lower in most tenors, the biggest declines centered around the 5-year which is down 0.034%. The 10-year yield is -0.028 basis points at 4.432%, a minor drop compared to its latest 2-week gain of 0.258 basis points.
Events on the U.S. economic calendar are sparse today, but several key reports are lined up for tomorrow and Friday (no reports are scheduled for the 4th of July holiday on Thursday). Tomorrow’s reports include Mortgage Applications, ADP Employment Change, Trade Balance, Initial & Continuing Jobless Claims, Factory Orders, Durable Goods, and capped by the FOMC Meeting Minutes from June 12th. Friday’s data is centered around Change in Nonfarm Payrolls for June, estimated +195k vs. 272k previous.
Fed Chairman Powell speaks today at a central bank policy forum alongside ECB’s Lagarde.
