The dollar holds its ground against the rest of the major currencies bloc
The greenback is keeping firmer on the session so far, with EUR/USD easing towards 1.0815 currently while USD/JPY is still pivoting around the 109.00 handle. The aussie and kiwi are still keeping lower as well but both currencies are swinging around a bit so far.
This continues to hint that dollar funding pressures are likely still persisting and that is a key area of concern for the market right now. However, investors also have to balance out central bank stimulus and in this case, the ECB bazooka that was announced overnight.
The initial reaction was that there seems to be a vote of confidence but it isn't too overwhelming, at least in the equities space. European stocks were trading higher earlier but have given up majority of those gains already now.
The Stoxx 600 index is now flat on the day with the DAX also down by 0.5%, erasing earlier gains of more than 1% to start the session. Meanwhile, US futures have also eased lower from positive territory to be down by just over 1% currently.
At the same time, 10-year Italian bond yields have climbed up to 1.68% now - nearly 30 bps higher relative to the open this morning. That said, yields are still much lower than the high seen yesterday near 3% so there's that to consider.
If anything, this continues to point towards some dislocation pressures in the market but investors are also trying to figure out if central bank stimulus is able to overcome that. Hence, the fluctuating movement seen so far this morning.
