Aussie holds gains ahead of European markets open
Aussie stays firmer with other major currencies little changed overall
The aussie is holding firmer on the session after a more solid labour market report earlier today. Jobs growth noticeably improved while the headline unemployment rate held steady (trend unemployment rate did nudge a little higher though).
That has seen Australian cash rate futures pare back odds of a 25 bps rate cut for September, with markets now only seeing a ~23% probability of that - previously ~50%.
Other major currencies are more steady with mild gains seen in the loonie as USD/CAD sits close to 1.3300. That said, the pair keeps in a narrow 23 pips range so far today.
US futures are more steady, seen up by around 0.5% now but as mentioned before, keep an eye on the bond market for any significant moves. Treasury yields are still lower, though we're seeing the weakness abate somewhat over the past half-hour.
Looking ahead, it's all about risk sentiment at the moment as markets look to adjust to a new focus of the global economy heading towards a more profound slowdown.
I don't think markets are wrong to be a little more cautious/defensive on the headlines yesterday but when you see how the fear has gone "viral" on the likes of social media, you tend to question if the meltdown was overdone.
As such, be wary of a turnaround day in markets ahead but likely not as resounding as the drop experienced overnight.
I mean it's not like we're going to be seeing a global recession hit tomorrow.