Major currencies are little changed with the dollar a bit on the back foot
It's a bit perplexing how markets are in such a disconnect over the past two days as we adjust to the new norm. The PBOC fixed the yuan weaker again today, though it wasn't as weak as many had expected - much like yesterday.
But that shouldn't be "news" to anyone who has been paying attention to the message they are sending to markets since the start of the week. As such, markets turn their attention to more negative trade headlines as seen earlier today here.
Equities are more on the defensive (US futures down 0.4%) while bond yields are also lower (US Treasury 10-year yields down 2 bps) as we head into European trading.
However, major currencies are more complacent as they show little change to one another but are slightly firmer against the greenback. It's hard to read anything into the moves so far but if anything else, be wary of a more risk averse shift later on in the day.
Looking ahead, we'll have the UK preliminary Q2 GDP report to keep things interesting amid the focus on risk/trade developments to wrap up the week.
